Business blog + Japan | The Guardianhttp://www.theguardian.com/business/blog+world/japan
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Bank of England voted 7:2 to hold interest rates steady – as it happenedhttp://www.theguardian.com/business/blog/live/2014/oct/22/european-markets-to-rally-on-stimulus-hopes-business-live
<p>The Bank of England has published the minutes of its monthly rate-setting committee, revealing that a majority voted to keep interest rates at 0.5%</p><p class="block-time published-time"> <time datetime="2014-10-22T17:43:06.218+01:00">5.43pm <span class="timezone">BST</span></time> </p><p>Back to the Treasury Select committee, and its chair Andrew Tyrie has called Andrew Bailey’s statement that <strong><a href="http://www.theguardian.com/business/blog/live/2014/oct/22/european-markets-to-rally-on-stimulus-hopes-business-live#block-5447d703e4b0f2548d3f4b0d">he had not voted in favour of plans to ban allowances paid by banks, contrary to what the </a><a href="http://www.theguardian.com/business/blog/live/2014/oct/22/european-markets-to-rally-on-stimulus-hopes-business-live#block-5447d703e4b0f2548d3f4b0d">European Banking Authority said</a>, </strong>a “shocker”. Tyrie said:</p><p>Andrew Bailey today told the Committee that the European Banking Authority ‘incorrectly transmitted’ his views on role-based allowances last week. This looks like a shocker. We will be seeking a full explanation.</p><p class="block-time published-time"> <time datetime="2014-10-22T17:36:37.960+01:00">5.36pm <span class="timezone">BST</span></time> </p><p>The more upbeat mood seen this week among investors continued, with European stock markets finishing the day in positive territory. Some reasonable US numbers from the likes of Yahoo and Boeing, plus weak US inflation figures which could convince the Federal Reserve to keep interest rates lower for longer, combined to lift traders’s spirits. But it was not all optimistic, with talk of a number of European lenders set to fail the forthcoming EU bank stress tests. Meanwhile the ECB seemed to be playing down talk it would buy corporate bonds as part of its attempts to boost the struggling eurozone economy. Wall Street moved higher by the time Europe’s traders went home but then started to slip back. The final scores in Europe showed:</p><p class="block-time published-time"> <time datetime="2014-10-22T17:18:58.541+01:00">5.18pm <span class="timezone">BST</span></time> </p><p><strong>Andrew Bailey, chief executive of the Prudential Regulation Authority, has told MPs that he did not vote in favour of the European Banking Authority’s (EBA) proposals to ban “allowances”, which banks started paying to executives as a top up after the bonus cap was introduced this year.</strong> </p><p>My colleague Angela Monaghan was listening to the Bank of England’s Prudential Regulation Authority’s appearance earlier before the Treasury Select Committee hearing and writes:</p><p>Bailey said that contrary to reports from the EBA that the vote was unanimous, he was against the proposals. Confirming his vote publicly for the first time, he told the committee:</p><p>“I don’t agree with the opinion. I did not vote for the opinion. [The idea that the vote was unanimous] was incorrectly transmitted by the EBA. I was made aware because our press office was contacted [by the media] to say that they had received communication from the EBA that it was a unanimous vote.</p><p class="block-time published-time"> <time datetime="2014-10-22T16:27:03.529+01:00">4.27pm <span class="timezone">BST</span></time> </p><p><strong>Crude prices have edged lower after a US report showing a large rise in stocks last week.</strong></p><p>The US Energy Information Administration said inventories rose by 7.11m barrels, far more than the 2.7m increase analysts had been expecting. The report has helped push Brent crude down 0.09% to $86.14 a barrel.</p><p class="block-time published-time"> <time datetime="2014-10-22T16:17:00.991+01:00">4.17pm <span class="timezone">BST</span></time> </p><p><strong>And surprise, surprise: Facebook paid no UK corporation tax for the second year in a row.</strong> My colleague Mark Sweeney reports:</p><p>The world’s largest social media company reported a pre-tax loss of &pound;11.6m in the UK last year, despite its US parent company reporting a net profit of $1.5bn (&pound;900m).</p><p>UK revenues rose from &pound;34.6m to &pound;49.8m, according to Facebook UK’s latest financial filing at Companies House published on Wednesday.</p><p class="block-time published-time"> <time datetime="2014-10-22T15:35:23.771+01:00">3.35pm <span class="timezone">BST</span></time> </p><p><strong>Stock markets were lifted in part on Tuesday by reports the European Central Bank could buy corporate bonds as part of its efforts to stimulate the flagging eurozone economy.</strong></p><p>Although the official word was that no decision had been made, investors took the idea as a positive sign anyway.</p><p>ECB's Nowotny pouring ice-bucket over the Corp-Bond plan .... says no decision on that and says that open questions on the matter</p><p>*NOWOTNY SAYS ECB HAS NO PRESENT NEED FOR QE LEGAL ASSESSMENT</p><p>Ecb's Nowotny Says Euro Is Irreversible</p><p class="block-time published-time"> <time datetime="2014-10-22T15:19:13.573+01:00">3.19pm <span class="timezone">BST</span></time> </p><p><strong>After recent rallies, Wall Street is fairly flat in early trading as investors pause to catch their breath after all the volatility.</strong></p><p>The Dow Jones Industrial Average is currently up just 0.54 points while the S&amp;P 500 has edged up 4 points.</p><p class="block-time published-time"> <time datetime="2014-10-22T15:14:02.439+01:00">3.14pm <span class="timezone">BST</span></time> </p><p><strong>Glaxo’s restructuring plan could also involve floating part of its fast growing HIV and AIDS drugs business ViiV Healthcare.</strong></p><p>As a standalone company ViiV would be a member of the FTSE 100, with analysts at Jefferies valuing the business at around &pound;17bn. </p><p class="block-time published-time"> <time datetime="2014-10-22T15:00:03.610+01:00">3.00pm <span class="timezone">BST</span></time> </p><p>The big news from GSK is that its Ebola vaccine should be ready by the end of the year.</p><p>But market watchers are also paying close attention to the company’s cost-cutting plans.</p><p>The spectre of patent expiries and a changing US landscape have weighed on the shares, which have dropped 15% over the last year, and 14% in the last three months alone, as compared to a 5% decline for the wider FTSE100. This puts today’s share price spike* into perspective, although by the same token this could prove to be a turning point for the company. In the meantime, the market consensus of the shares as a hold may need to be positively re-evaluated.</p><p class="block-time published-time"> <time datetime="2014-10-22T14:35:59.999+01:00">2.35pm <span class="timezone">BST</span></time> </p><p>The European Central Bank has poured cold water on a report from a Spanish news wire that at least 11 banks have failed financial stress tests. <br /></p><p>The ECB is due to publish the results of a financial health check for 130 institutions on Sunday. A spokesman has said that any inference about the results would be “highly speculative”.</p><p>It’s pretty clear that not that many banks are going to fail it. A fair amount of balance sheet strengthening has taken place over the last six to nine months in anticipation of this exercise.</p><p class="block-time published-time"> <time datetime="2014-10-22T14:15:39.446+01:00">2.15pm <span class="timezone">BST</span></time> </p><p>A breakdown of how Tory MEPs voted from the Guardian’s Europe editor.</p><p><a href="https://twitter.com/hashtag/TeamJunckerEU?src=hash">#TeamJunckerEU</a> tory shambles - 9 abstained, 6 voted for, 3 voted against</p><p class="block-time published-time"> <time datetime="2014-10-22T14:06:44.931+01:00">2.06pm <span class="timezone">BST</span></time> </p><p>Alert to all UK economic regulation watchers. In just under 10 minutes, a host of senior people from the <a href="http://www.parliament.uk/business/committees/committees-a-z/commons-select/treasury-committee/inquiries1/parliament-2010/prudential-regulation-authority-annual-report-and-accounts-2013-14/">Prudential Regulation Authority will appear before the Treasury Select Committee</a>.</p><p>The witnesses include Andrew Bailey, deputy governor at the Bank of England and chief executive of the Prudential Regulation Authority.</p><p class="block-time published-time"> <time datetime="2014-10-22T13:54:25.744+01:00">1.54pm <span class="timezone">BST</span></time> </p><p>US consumer prices hardly moved last month, as falling energy prices cancelled out a slight rise in food costs.</p><p>Data from the US Bureau of Labor Statistics showed that the consumer price index inched up by just 0.1% in September. Energy prices fell 0.7%, while indices for food, alcohol and medical care increased slightly. <br /></p><p>Chart of US CPI, which up 0.1 percent month-on-month in Sept, up 1.7 pct year-on-year, tells the story. Sideways: <a href="http://t.co/LZlKUIoJoB">pic.twitter.com/LZlKUIoJoB</a></p><p>US CPI: Slightly hotter-than-expected but still trending lower <a href="https://twitter.com/search?q=%24USD&amp;src=ctag">$USD</a> <a href="https://twitter.com/search?q=%24SPY&amp;src=ctag">$SPY</a> <a href="http://t.co/DUdi4aCeyq">pic.twitter.com/DUdi4aCeyq</a></p><p class="block-time published-time"> <time datetime="2014-10-22T13:40:28.892+01:00">1.40pm <span class="timezone">BST</span></time> </p><p>The UK’s largest pharmaceutical company GlaxoSmithKline expects that the first doses of its Ebola vaccine will be ready by the end of the year.<br /></p><p>Andrew Witty, GSK chief executive, told reporters that the GSK vaccine was likely to be the first vaccine available and would be a “useful tool” for the World Health Organization and other agencies.</p><p class="block-time published-time"> <time datetime="2014-10-22T13:27:19.758+01:00">1.27pm <span class="timezone">BST</span></time> </p><p>We have confirmation from reporters in Strasbourg that the Conservatives abstained in today’s vote on the next European Commission, led by Luxembourg’s Jean-Claude Juncker.</p><p>One source told Reuters that the incoming Commission president was disappointed by the Tories’ abstention and believes that the Tories have reneged on a deal that resulted in a plum job for Jonathan Hill, the former lobbyist and Cameron ally.</p><p>London failed to honour their part of the deal.</p><p>Many Tories defied ECR instruction to abstain. Hannan Deva McClarkin voted no. Ashworth Girling Karim Kirkhope McIntyre Swinburne voted yes</p><p class="block-time published-time"> <time datetime="2014-10-22T13:06:57.345+01:00">1.06pm <span class="timezone">BST</span></time> </p><p> The French oil company <strong>Total</strong> has chosen Patrick Pouyann&eacute;, head of its chemicals and refining business, to take over as chief executive, following the death of Christophe de Margerie in a plane crash in Russia.</p><p> Thierry Desmarest, currently honorary chairman, has been nominated as executive chairman until the end of 2015. After this time, the roles of CEO and chairman will be combined again. De Margerie had done both jobs.<br /></p><p>Pouyanne had a key role in merging <strong>Total</strong>’s loss-making refining and petrochemical units in recent years, and also had senior roles at the group’s exploration units in Angola and Qatar.</p><p>A graduate of France’s elite Polytechnique and Mines engineering colleges, he was also an advisor in ministerial offices under previous conservative governments.</p><p class="block-time published-time"> <time datetime="2014-10-22T12:15:47.047+01:00">12.15pm <span class="timezone">BST</span></time> </p><p>Do you know what you are having for dinner tonight? According to research cited by the Daily Telegraph, at 4pm, 3 in 4 people don’t know what they will eat for their evening meal that night.<br /></p><p>And that is the kind of question that keeps awake the bosses of the UKs’ big supermarkets, as they contemplate massive changes sweeping through the industry.</p><p>People are buying food for now... The notion that you are going to go and push a trolley around for the week is a thing of the past. It is fundamentally changing the market. </p><p> All these trends are effectively pulling people out of big box, out-of-town retailing. That is really the challenge that the ‘big four’ are facing. They have an estate for how people shopped two decades ago. </p><p>This is a once in 50 to 60 year change. The last big change was the supermarket [in the 1950s]. I think what you are seeing now is as fundamental.</p><p class="block-time published-time"> <time datetime="2014-10-22T11:45:27.721+01:00">11.45am <span class="timezone">BST</span></time> </p><p>The European Parliament has backed the incoming European Commission headed by Jean-Claude Juncker.</p><p>No big surprise there, and it appears the Commission had a healthy majority, with 423 votes of the 699 MEPs voting in favour.<br /></p><p>.<a href="https://twitter.com/EU_Commission">@EU_Commission</a> <a href="https://twitter.com/JunckerEU">@JunckerEU</a> est investie par le Parlement europeen avec 423 voix!!! Bravo! <a href="http://t.co/S0HhjdJmvV">pic.twitter.com/S0HhjdJmvV</a></p><p>Jean Claude Juncker now officially confirmed by the European Parliament as President of the European Commission. <a href="http://t.co/u3uH3PbEc2">pic.twitter.com/u3uH3PbEc2</a></p><p>I feel honoured that <a href="https://twitter.com/hashtag/TeamJunckerEU?src=hash">#TeamJunckerEU</a> has received the democratic backing of the <a href="https://twitter.com/Europarl_EN">@Europarl_EN</a>. Now time to get to work <a href="http://t.co/ny75klQsR6">http://t.co/ny75klQsR6</a></p><p class="block-time published-time"> <time datetime="2014-10-22T11:29:07.130+01:00">11.29am <span class="timezone">BST</span></time> </p><p>One day after a plane crash that saw the boss of Total and three crew members killed by a drunk driver at a Russian airport, the French oil company is moving fast to fill the gap at the top.<br /></p><p>According to the <a href="http://%20http://www.lesechos.fr/journal20141022/lec2_industrie_et_services/0203877347413-la-mort-de-christophe-de-margerie-laisse-total-sous-le-choc-1056246.php?YTRzG0iyc2X3C1HZ.99">French business daily Les Echoes</a>, the board of the oil company is meeting today and will consider splitting the functions of chairman and chief executive, which were both held by Christophe de Margerie, who died in the plane crash.</p><p class="block-time published-time"> <time datetime="2014-10-22T11:13:02.293+01:00">11.13am <span class="timezone">BST</span></time> </p><p>Over in Strasbourg, the European Parliament is preparing to vote for the new European Commission, headed by ex-Luxembourg prime minister and eurozone bigwig Jean-Claude Juncker.</p><p>Juncker and his 28-strong team take office on 1 November. This morning he outlined his priorities to MEPs, promising a €300bn plan to boost jobs and growth, although much of this is to come from private investors, not governments.<br /></p><p>The <a href="https://twitter.com/ecrgroup">@ecrgroup</a> and <a href="https://twitter.com/GreensEP">@GreensEP</a> will abstain from endorsing <a href="https://twitter.com/hashtag/TeamJunckerEU?src=hash">#TeamJunckerEU</a> and <a href="https://twitter.com/ALDEgroup">@ALDEgroup</a> will support it</p><p>A bit odd. Tories hugely rewarded w/finance portfolio MT <a href="https://twitter.com/catherinemep">@catherinemep</a> Tory MEPs abstain on <a href="https://twitter.com/EU_Commission">@EU_Commission</a>. Means not supporting Lord Hill</p><p class="block-time published-time"> <time datetime="2014-10-22T10:38:30.767+01:00">10.38am <span class="timezone">BST</span></time> </p><p> After this morning’s BoE minutes showed a majority of MPC members are in favour of keeping rates on hold, analysts are not expecting change any time soon.</p><p>Market watchers think rates could be stuck at their current historic low of 0.5% well into 2015, or even into 2016.</p><p> The Bank of England monetary policy meeting minutes painted a fairly bleak picture this morning, suggesting that weaker growth and low in inflation in the eurozone has increased risks to the UK. Also, with average earnings still struggle to keep pace with the low level of inflation a rate hike wasn’t justified. Although two members did vote for a rate hike, the bank is a lot more dovish now. <br /></p><p> Pressures on the UK economy from the Eurozone and China were the main concerns of the Bank of England, but alongside recent falls in inflation and wage growth, the market seems justified in shifting its expectations of when the Bank of England will look to start normalising monetary policy.</p><p> Momentum within and without the UK economy has slowed; we have seen slowing growth in China, the US, the Eurozone and likely the UK this Friday.</p><p>We expect only a mild UK slowdown, although a little sharper than the BoE is banking on. Manufacturing is suffering from stalled Eurozone growth, but there are no signs of the wider contagion to the UK that came in 2011/12. Moreover, the disastrous August German data were exaggerated by holiday timing. If the downside risks do not materialise and Eurozone growth resumes early next year, which is our base case, then the gloom now will give way to a rosier growth outlook next year. Indeed, that outlook would then be boosted by cheaper food and energy prices. We look for the BoE to begin hiking in June next year, after the uncertainty around the general election has passed.</p><p>We have recently put back our expectation of the first interest rate hike from February to mid-2015. We suspect that the majority of MPC members will prefer to err on the side of caution in raising interest rates – given increased global growth concerns (particularly the weakness in the Eurozone) posing an increased downside risk to the UK growth outlook, earnings growth still weak and consumer price inflation down to 1.2% in September and likely to go lower still in the near term given the weakness of oil prices.<strong><br /></strong><strong><br /></strong></p><p class="block-time published-time"> <time datetime="2014-10-22T10:05:36.043+01:00">10.05am <span class="timezone">BST</span></time> </p><p>Following the publication of the minutes, the pound has dropped 0.5% against the dollar to $1.603.<br /></p><p class="block-time published-time"> <time datetime="2014-10-22T10:03:10.918+01:00">10.03am <span class="timezone">BST</span></time> </p><p>The Bank’s minutes also provide interesting reading on the state of the international economy, especially the eurozone.</p><p>Here are a few highlights:</p><p class="block-time published-time"> <time datetime="2014-10-22T09:50:16.615+01:00">9.50am <span class="timezone">BST</span></time> </p><p>The Bank of England minutes refer to the last MPC meeting held on 7 &amp; 8 October </p><p><strong>The majority view</strong></p><p>For these members, there remained few signs of inflationary pressure in the UK economy, even after looking through the effects of a stronger sterling exchange rate. In particular, unit labour costs had fallen over the past year. Pay growth, which was likely to remain subdued in the public sector, was lower than was consistent with meeting the inflation target in the medium term. Household inflation expectations had fallen a little, although they continued to be well anchored to the inflation target. While the economy had been growing sufficiently quickly to absorb some of the slack in the economy, there were some signs that the pace of growth was beginning to ease. The housing market appeared to be cooling with house price growth slowing to a more sustainable pace. Further downside news in the euro area had increased the risks to the durability of the UK expansion in the </p><p>While growth in the euro-area economy had been disappointing, so far, in contrast to 2011, the United Kingdom had not been affected by damaging financial contagion. The continued fall in the unemployment rate was consistent with the rapid absorption of slack and, even if the rate at which unemployment was falling were to ease markedly, it would nonetheless reach its estimated medium-term equilibrium level by the middle of 2015. Survey evidence of tightening in the labour market, including from the Bank’s Agents, suggested that wage growth might pick up quite sharply as slack was absorbed. Since monetary policy could be expected to operate only with a lag, it was desirable to anticipate labour market pressures by raising Bank Rate in advance of them. It was possible that the real rate of interest consistent with stable inflation over the medium term was now rising. <br /></p><p class="block-time published-time"> <time datetime="2014-10-22T09:36:45.847+01:00">9.36am <span class="timezone">BST</span></time> </p><p>Key information from the Bank of England minutes available <a href="http://www.bankofengland.co.uk/publications/minutes/Pages/mpc/default.aspx">here</a></p><p class="block-time published-time"> <time datetime="2014-10-22T09:32:53.736+01:00">9.32am <span class="timezone">BST</span></time> </p><p>The Bank of England voted 7:2 last month in favour of keeping interest rates at 0.5%, according to minutes just published.</p><p class="block-time published-time"> <time datetime="2014-10-22T09:20:05.084+01:00">9.20am <span class="timezone">BST</span></time> </p><p><strong>Retail analyst Nick Bubb </strong>has some interesting thoughts on the arrival of Euan Sutherland at SuperGroup, which puts Julian Dunkerton, the chief executive who launched the company, in a new role.</p><p> Today’s unexpected news that Euan Sutherland is to replace Julian Dunkerton as the CEO of SuperGroup, with immediate effect, isn’t quite as outlandish as it seems because he has been a non-exec there for nearly 2 years, so he knows what he’s letting himself in for. But it’s certainly going to be very different from running the Co-op or B&amp;Q and he will be hoping that “Jules” isn’t too much of a backseat driver, in his new role as “Founder and Product and Brand Director”. After a difficult autumn season to date, the next scheduled news from SuperGroup is the Q2 trading update on November 6<sup>th</sup> and then the interim results on December 11<sup>th</sup>. </p><p class="block-time published-time"> <time datetime="2014-10-22T08:56:24.249+01:00">8.56am <span class="timezone">BST</span></time> </p><p>Heineken, the world’s third largest beer maker, has been hit by lower than expected sales as Europeans drank less during a wet summer.</p><p>The brewer, which also makes Sol, Amstel and Strongbow cider, as well as the namesake beer, said global beer sales were hardly changed over July- September, reflecting a slump in sales in Europe.</p><p class="block-time published-time"> <time datetime="2014-10-22T08:41:03.030+01:00">8.41am <span class="timezone">BST</span></time> </p><p>Retail analyst Jonathan De Mello thinks Home Retail Group have made the right decision to close Homebase stores, but asks if they could develop a click and collect business.<br /></p><p>Homebase to close circa 80 outlets (25% of estate) by 2018. The right move but couldn't they consider supplementing with smaller c+c stores?</p><p class="block-time published-time"> <time datetime="2014-10-22T08:38:23.939+01:00">8.38am <span class="timezone">BST</span></time> </p><p>From banking to fashion: here is our story on the former boss of Coop, Euan Sutherland, who is taking over as the boss of SuperGroup, the company behind the shop Superdry.</p><p><strong><a href="http://www.theguardian.com/business/2014/oct/22/ex-coop-chief-takes-over-superdry">Ex-Co-op chief takes over at Superdry </a></strong></p><p>Euan Sutherland becomes CEO of SuperGroup! To say that was unexpected is an understatement.</p><p class="block-time published-time"> <time datetime="2014-10-22T08:32:11.564+01:00">8.32am <span class="timezone">BST</span></time> </p><p>Is Homebase closing stores because people simply aren’t any good at changing washers and building garden sheds? Or perhaps, they don’t want to do it themselves?<br /></p><p>In Home Retail Group’s statement to the City the company appears to suggest as much (my emphasis).<br /></p><p>Homebase competes in several segments of the broader home improvement market, including Do-It-Yourself (DIY) and home enhancement. As a result of several economic factors, the home improvement market experienced a cyclical downturn for a number of years through to 2012. Although economic indicators have more recently improved, several structural factors continue to affect home improvement retailing including an excess of retail space, <strong>the rise of a generation less skilled in DIY projects</strong>, and the growth of non-traditional digital and multi-channel competitors and category specialists. </p><p>Home Retail CEO says &quot;we are all in on Homebase&quot; and not looking at a sale of the business.</p><p class="block-time published-time"> <time datetime="2014-10-22T08:20:43.332+01:00">8.20am <span class="timezone">BST</span></time> </p><p>The main European share indices have risen modestly in early trading, although the FTSE100 is flat.<br /></p><p class="block-time published-time"> <time datetime="2014-10-22T08:13:18.796+01:00">8.13am <span class="timezone">BST</span></time> </p><p>Shares in Home Retail Group have fallen by more than 5%, after the company said it was closing almost a quarter of its Homebase stores.<br /></p><p class="block-time published-time"> <time datetime="2014-10-22T08:02:17.234+01:00">8.02am <span class="timezone">BST</span></time> </p><p>Big news in the UK retail world this morning. Home Retail Group has announced it will close around a quarter of Homebase DIY stores over the next three years. Like other big retail outfits, the group has too many big out-of-town stores that aren’t making enough money as consumers buy more over the internet.</p><p>More to follow....<br /></p><p>Home Retail Group to shut a quarter of Homebase stores (about 80) over 3 years. I'll be tweeting from company's call with reporters at 8am.</p><p class="block-time published-time"> <time datetime="2014-10-22T07:52:53.296+01:00">7.52am <span class="timezone">BST</span></time> </p><p>‘Interest rates will not rise before the election’. This has been the consensus among economists for several weeks, even before the Bank of England’s chief economist Andy Haldane said that <a href="http://www.theguardian.com/business/2014/oct/17/bank-england-chief-economist-gloomier-interest-rates-andrew-haldane">he felt gloomier about the prospects for the UK economy</a>. </p><p>Last month we found out that two members of the Bank’s monetary policy committee voted to raise rates.<strong> Martin Weale and Ian McCafferty</strong>, both external members of the committee, called for rates to rise to 0.75% in response to lower unemployment and a tightening labour market, but were outvoted by the seven other members of the committee. </p><p>The rapid easing of present and pipeline price pressures will surely have convinced the seven members of the MPC who voted to keep rates on hold last month to maintain their votes. <br /></p><p>While the figures were released after its meeting, the MPC would have known that CPI inflation fell to just 1.2% in September – well below its 1.7% forecast in August’s Inflation Report. And the sharp fall in oil prices, from &pound;100pb at September’s meeting to just $88pb at October’s, has left CPI inflation on track to dip below 1% later this year – a rate that would force Mr. Carney to reach for his letter-writing pen. </p><p class="block-time published-time"> <time datetime="2014-10-22T07:47:56.632+01:00">7.47am <span class="timezone">BST</span></time> </p><p><strong>Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and the business world.</strong></p><p>Asian shares have risen after healthy gains on US markets and positive Japanese trade data. Tokyo’s benchmark Nikkei index closed up 2.64%.</p><p>While ECB officials have denied that any move is imminent the nature of the speculation is so ECB, using unnamed sources to plant an idea in the markets consciousness and then let it germinate on fertile ground so that investors can grasp at straws and help push asset prices higher.</p> <a href="http://www.theguardian.com/business/blog/live/2014/oct/22/european-markets-to-rally-on-stimulus-hopes-business-live">Continue reading...</a>Bank of EnglandEuropean Central BankEconomicsEuropean monetary unionJapanWed, 22 Oct 2014 16:44:37 GMThttp://www.theguardian.com/business/blog/live/2014/oct/22/european-markets-to-rally-on-stimulus-hopes-business-livePhotograph: Matt Rourke/APJohnson &amp; Johnson says it will start safety testing in early January on a potential Ebola vaccine. Matt Rourke/APPhotograph: Matt Rourke/APJohnson &amp; Johnson says it will start safety testing in early January on a potential Ebola vaccine. Matt Rourke/APPhotograph: Andrew Winning/ReutersA man walks past the Bank of England in the city of London.Photograph: Andrew Winning/ReutersA man walks past the Bank of England in the city of London.Jennifer Rankin and Nick Fletcher2014-10-22T16:44:37ZUS GDP revised up but German consumer confidence slips - business livehttp://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-live
<ul><li><a href="http://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-live#block-54253977e4b0d4b1d5b66fd9">German economic optimism falls for second successive month</a></li><li><a href="http://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-live#block-5425618ae4b0d4b1d5b67023">Bond king Bill Gross jumps ship from Pimco</a></li><li><a href="http://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-live#block-54255c96e4b07cfcd5512eb3">US second quarter GDP rose 4.6%</a></li><li><a href="http://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-live#block-5425114ae4b0d9a595cc4668">Banknote printer sees stocks plummet on profits warning</a></li><li><a href="http://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-live#block-5425247de4b08fd97d1ebb57">Russian court seizes oil assets of imprisoned billionaire</a></li></ul><p class="block-time published-time"> <time datetime="2014-09-26T17:30:26.565+01:00">5.30pm <span class="timezone">BST</span></time> </p><p>The negatives certainly outweighed the positives this week, ranging from profit warnings from the likes of Tesco to growing expectations of interest rate rises in the UK and US to worries about growth rates in China and the eurozone. Oh yes, and Russian retaliation for the sanctions imposed in response to its actions in Ukraine, and the repercussions of air strikes against Isis. But the week ended in marginally more upbeat fashion:</p><p class="block-time published-time"> <time datetime="2014-09-26T17:10:55.142+01:00">5.10pm <span class="timezone">BST</span></time> </p><p><strong>Some good news for Sweden</strong> - Standard &amp; Poor’s has just confirmed its credit ratings at AAA with a stable outlook.</p><p>The agency said the ratings “reflect a prosperous, competitive economy and successive governments’ commitment to prudent economic policies.” Phew!</p><p class="block-time published-time"> <time datetime="2014-09-26T17:07:42.068+01:00">5.07pm <span class="timezone">BST</span></time> </p><p><strong>Over to Greece where the country’s statistics agency has reported that salaries are continuing to drop</strong>. The data comes on the heels of a parliamentary report revealing that far from being eased, poverty is also worsening in the debt-stricken country. Helena Smith reports from Athens:</p><p>Yet more evidence of Greece’s austerity-driven depression in figures released by Elstat, the country’s statistics office. While fiscal adjustment continues apace, on the ground Greeks are far from feeling the headway being made. The agency reported today that in the second quarter of 2014 Greece’s wage index dropped by 1.4% compared to the same period last year – worsening an overall decline that now stands at 23.8% since 2010 when Europe’s debt crisis exploded in the Greek capital. Raising the minimum wage has been a major demand of the main opposition radical left Syriza party whose leader is heading the fight against what he describes as the perniciousness of “Merkelism” in Europe.</p><p>The drop follows publication of another report, this time by the Greek parliament’s State Budget office, revealing that three in every five Greeks (the equivalent of some 6.3m people) were affected by poverty in 2013 either because of unemployment or “material deprivation.” While some 2.5m people lived below the poverty threshold, another 3.8m were “facing the threat of poverty,” said the study entitled “Minimum Income Policies in the European Union and Greece: A Comparative Analysis.”</p><p class="block-time published-time"> <time datetime="2014-09-26T16:22:27.744+01:00">4.22pm <span class="timezone">BST</span></time> </p><p>Our full take on the US GDP figures from my colleague Angela Monaghan is now up:</p><p>The US economy grew at its fastest rate for two and a half years in the second quarter after a broad-based pick-up in activity, boosting hopes of a sustained recovery.</p><p>The commerce department increased its estimate of GDP growth from an annual rate of 4.2% to 4.6%. It was the best performance from the world’s largest economy since the fourth quarter of 2011, and the upward revision was driven by stronger export growth and business spending than previously estimated.</p><p class="block-time published-time"> <time datetime="2014-09-26T15:26:54.945+01:00">3.26pm <span class="timezone">BST</span></time> </p><p><strong>US consumer confidence in September hit its highest level for more than a year, </strong>according to a final reading on the Thomson Reuters/University of Michigan survey.</p><p>The index of consumer sentiment rose from 82.5 at the end of August to 84.6, the highest since July 2013. Confidence was boosted by more favourable prospects for the US economy and higher expectations for personal income, according to the survey.</p><p class="block-time published-time"> <time datetime="2014-09-26T15:01:55.937+01:00">3.01pm <span class="timezone">BST</span></time> </p><p>US stocks have risen this morning, recovering somewhat from their biggest drop since July.</p><p class="block-time published-time"> <time datetime="2014-09-26T14:51:28.298+01:00">2.51pm <span class="timezone">BST</span></time> </p><p>Meanwhile in Slovenia...</p><p>Beno&icirc;t Cœur&eacute;, a member of the European Central Bank’s governing committee, <a href="https://www.ecb.europa.eu/press/key/date/2014/html/sp140926.en.html">has given a speech</a>, where he argued that Europe’s banks are in a stronger position to lend following health checks.</p><p>My main message today is simple: we need to focus on the quality of credit, not only the quantity.<br /></p><p class="block-time published-time"> <time datetime="2014-09-26T14:38:11.937+01:00">2.38pm <span class="timezone">BST</span></time> </p><p>More essential reading on the Bill Gross/Pimco story.</p><p>The <strong>Wall Street Journal reported on Wednesday that regulators at the US Securities and Exchange Commission, were probing Pimco </strong>over misleading information about the fund’s performance.<br /></p><p>One possible focus of the SEC inquiry, according to people familiar with the matter: whether Pimco’s alleged maneuver meant investors were given inaccurate information about the fund’s performance. It is a breach of securities law to provide investors with misleading information about values or performance, even if the wrong information was supplied unintentionally.</p><p class="block-time published-time"> <time datetime="2014-09-26T14:34:22.771+01:00">2.34pm <span class="timezone">BST</span></time> </p><p>Bill Gross jumped before he was pushed.</p><p>This becomes evident from reading a statement from Pimco’s chief executive officer, <a href="http://www.businessinsider.com/bill-gross-leaves-pimco-2014-9#ixzz3EQbl3BTf">published by Business Insider</a>.<br /></p><p> While we are grateful for everything Bill contributed to building our firm and delivering value to PIMCO’s clients,<strong> over the course of this year it became increasingly clear that the firm’s leadership and Bill have fundamental differences about how to take PIMCO forward</strong>. [My emphasis].<br /></p><p>As part of our responsibilities to our clients, employees and parent, PIMCO has been developing a succession plan for some time to ensure that the firm is well prepared to manage a seamless leadership transition in its Portfolio management team...<br /></p><p class="block-time published-time"> <time datetime="2014-09-26T14:24:37.142+01:00">2.24pm <span class="timezone">BST</span></time> </p><p>Sid Verma of Euromoney flags up that Andrew Balls, brother of the shadow chancellor, could step into the top job at Pimco. Andrew Balls is a deputy chief investment officer, leading Pimco’s European operations.<br /></p><p>Will Ed Balls' brother get promoted now? <a href="http://t.co/X2vWHhC2dO">http://t.co/X2vWHhC2dO</a></p><p class="block-time published-time"> <time datetime="2014-09-26T14:18:36.807+01:00">2.18pm <span class="timezone">BST</span></time> </p><p> Bill Gross may not be a typical super-rich fund manager. He never trusted the exotic quantitative models that left many of his rivals exposed to toxic assets. In <a href="http://www.theguardian.com/business/2010/mar/12/bill-gross-bonds-investor">an interview with the Guardian</a> he also said bankers, such as himself, ought to pay more taxes.</p><p>But he was tough when it came to managing his clients money, he insisted.<br /></p><p>My clients don’t pay me to feel sorry, they pay me to bring them money. I am tough but I have a soft side...When I go home, I don’t watch Fox [the Murdoch-owned right-wing news channel] and I vote for Obama.</p><p class="block-time published-time"> <time datetime="2014-09-26T14:05:38.478+01:00">2.05pm <span class="timezone">BST</span></time> </p><p>The business world is pretty excited about the departure of Bill Gross, so-called bond king, from Pimco, one of the largest money managers in the world.<br /></p><p class="block-time published-time"> <time datetime="2014-09-26T13:49:34.701+01:00">1.49pm <span class="timezone">BST</span></time> </p><p>Here is what Twitter users are saying about the US data.<br /></p><p>One Mumbai-based fund manager expects central bankers to raise interest rates.<br /></p><p>US GDP grows faster than expected at 4.6% in Q2. Rate hikes sooner than later.</p><p><a href="https://twitter.com/hashtag/Dow?src=hash">#Dow</a> drifts of its high of the morning but still holding 17,000 after US GDP revised up to 4.6% as widely expected. <a href="https://twitter.com/hashtag/trading?src=hash">#trading</a> <a href="https://twitter.com/hashtag/indices?src=hash">#indices</a></p><p>Within 5 minutes, US GDP lands at 4.6% and Bill Gross leaves Pimco. More then a market can absorb in a whole day.</p><p class="block-time published-time"> <time datetime="2014-09-26T13:38:01.983+01:00">1.38pm <span class="timezone">BST</span></time> </p><p>More details on the latest US data - revisions to earlier forecasts of Q2 data.<br /></p><p class="block-time published-time"> <time datetime="2014-09-26T13:32:24.145+01:00">1.32pm <span class="timezone">BST</span></time> </p><p>Breaking news: US Q2 GDP has been revised upwards to 4.6%<br /></p><p class="block-time published-time"> <time datetime="2014-09-26T13:20:56.338+01:00">1.20pm <span class="timezone">BST</span></time> </p><p>A Boeing 787 Dreamliner flying from Chicago to Warsaw has been forced to make an emergency landing at Glasgow airport.</p><p class="block-time published-time"> <time datetime="2014-09-26T12:09:00.377+01:00">12.09pm <span class="timezone">BST</span></time> </p><p>The eurozone debt crisis has not gone away, it is just resting. Without a programme of debt forgiveness, Europe’s economies cannot return to growth.</p><p>Europe needs its own Brady bond plan. Aggregate the debt, reduce principals and coupons, and allow the markets to price it free of political rhetoric and monetary smokescreens. Use QE but as a salve to facilitate and ease the transition. </p><p class="block-time published-time"> <time datetime="2014-09-26T11:54:26.928+01:00">11.54am <span class="timezone">BST</span></time> </p><p>The FTSE100 has been tipped into positive territory, thanks to a modest rally in banking stocks after a Sky news report suggested that a probe into rigging foreign exchange rates would soon come to a close.</p><p> The FTSE 350 Banking index has risen 0.5%, as investors take heart that a settlement is on the way, although the mood on Barclays is more cautious.<br /></p><p class="block-time published-time"> <time datetime="2014-09-26T11:44:48.379+01:00">11.44am <span class="timezone">BST</span></time> </p><p>More on that <a href="http://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-live#block-54251c80e4b07cfcd5512e32">FT story about the UK’s nominee for European commissioner, Lord Hill, being denied the power to oversee regulation</a> on bankers bonuses.</p><p>The FT reported that the UK nominee had lost these responsibilities to ease his way through confirmation hearings with the European Parliament, where there are vocal critics of Hill’s appointment.</p><p>Via Reuters<em><br /></em></p><p>Officials close to [European Commission president] Jean-Claude Juncker said the decision to move oversight of pay to the EU’s justice portfolio was made before Hill was offered the post of EU commissioner for financial stability, financial services and capital markets union. They said Juncker decided that oversight of financial sector pay was better handled by the justice commission because that directorate already handles other corporate issues such as contract law.</p><p class="block-time published-time"> <time datetime="2014-09-26T11:18:57.975+01:00">11.18am <span class="timezone">BST</span></time> </p><p>Some interesting comments from our readers on the German consumer confidence survey and general economic picture in Europe <a href="http://discussion.theguardian.com/comment-permalink/41424874">(click here</a> if this text is a bit too small to read comfortably).<br /></p><p class="block-time published-time"> <time datetime="2014-09-26T11:13:49.471+01:00">11.13am <span class="timezone">BST</span></time> </p><p> German consumer confidence has fallen further amid concerns over conflicts in Ukraine and economic weakness across Europe, according to a closely-watched survey.<br /> </p><p class="block-time published-time"> <time datetime="2014-09-26T10:54:29.838+01:00">10.54am <span class="timezone">BST</span></time> </p><p>The Russian rouble has <strong>hit a fresh all-time low against the dollar</strong>: it touched 38.97 earlier today, a nadir since the currency was relaunched in 1998.</p><p class="block-time published-time"> <time datetime="2014-09-26T10:51:44.310+01:00">10.51am <span class="timezone">BST</span></time> </p><p>Sky News is reporting that some of the UK’s largest banks could pay <a href="http://news.sky.com/story/1342492/fca-closes-in-on-2bn-currency-rigging-deal">&pound;2bn in fines for manipulation of global foreign exchange markets</a>.</p><p>The City regulator has been “in secret talks” with the banks, which include Barclays, HSBC and Royal Bank of Scotland, to discuss the outline terms of a deal that could be announced as soon as November, according to Sky. Foreign banks Citi, JP Morgan and UBS, have also been involved in the talks with the Financial Conduct Authority.<br /></p><p> According to senior banking sources, the settlements, which would be confirmed simultaneously, could cost in the region of &pound;2bn in total - which would be the UK regulator’s biggest-ever series of fines for the same offence.</p><p> The banks, which also include would pay different sums, depending on the gravity of their traders’ alleged efforts to artificially move foreign currency rates.</p><p class="block-time published-time"> <time datetime="2014-09-26T10:38:16.241+01:00">10.38am <span class="timezone">BST</span></time> </p><p><strong>Air strikes in the Middle East = rising oil prices? Not necessarily.</strong><br /></p><p>Brent crude fell has fallen below $97 a barrel this morning and is heading for its worst month since April 2013.<br /></p><p>The U.S. energy renaissance is just beginning... The Middle East is no longer as influential in setting oil prices </p><p class="block-time published-time"> <time datetime="2014-09-26T09:54:21.911+01:00">9.54am <span class="timezone">BST</span></time> </p><p>Fund manager Neil Woodford also had a few interesting things to day about Tesco. </p><p>My colleague Sean Farrell has been listening back to his interview on Today and has picked out these lines.</p><p>I used to be a [Tesco] shareholder some years ago and exited the position because I was concerned about some of the things that are playing out now. Clearly I didn’t anticipate the sort of problem we have just heard about this week. <br /></p><p>There are many structural and cyclical challenges. When cyclical problems are overlaid with structural problems the solutions tend to be much, much more difficult and longer term. So the industry, in the near term, faces a long road to exit this period of depressed margins and crushed profitability, and maybe asset bases [and] balance sheets need to be rebalanced in time before the industry can reemerge as an investable proposition from my point of view. The immediate future is going to be tough for the sector but particularly for Tesco.</p><p class="block-time published-time"> <time datetime="2014-09-26T09:53:05.474+01:00">9.53am <span class="timezone">BST</span></time> </p><p>Our latest story about troubled Tesco, which has revealed it is to pay former finance director, Laurie McIlwee, a &pound;1m payoff next week, despite the &pound;250m accounting scandal.</p><p><strong>Zoe Wood, the Guardian’s retail correspondent, </strong>reports that McIlwee will be paid the cash specified in his contract. “He quit the business in April and was told to stay away from the office – a period when it appears the finances of the UK’s largest retailer spun out of control.”</p><p class="block-time published-time"> <time datetime="2014-09-26T09:43:57.918+01:00">9.43am <span class="timezone">BST</span></time> </p><p>A familiar tale from Moscow.</p><p>A Russian court has seized shares in the oil company Bashneft, owned by Sistema, the conglomerate controlled by wealthy businessman Vladimir Yevtushenkov, who is <a href="http://www.theguardian.com/business/2014/sep/25/oligarch-vladimir-yevtushenkov-remain-under-house-arrest">currently under house arrest</a>.</p><p>The court granted a request by the Russian prosecutor general’s office, which said on Friday it had uncovered “significant violations” of the law in the sale of energy assets in the Ural mountains region of Bashkortostan, including Bashneft.</p><p>“Taking into consideration that the disposal of those assets was done in violation of procedures on the privatisation of state property, the prosecutor general’s office, with the aim of protecting state interests, has filed a lawsuit seeking interim measures involving the seizure of shares,” it said.</p><p>Before they were going after people who were politically inconvenient like Khodorkovsky and [exiled media magnate Vladimir] Gusinsky,” says “Now they’re going after people who are not part of the inner circle. In these times neutrality is no longer enough.</p><p class="block-time published-time"> <time datetime="2014-09-26T09:19:30.484+01:00">9.19am <span class="timezone">BST</span></time> </p><p><strong>One of the country’s best performing fund managers, Neil Woodford</strong>, <strong>has said his industry overcharges its clients.</strong></p><p>In an interview with <a href="http://www.bbc.co.uk/programmes/b04hyvtf">BBC Radio 4’s Today programme</a>, he said most fund managers are too short-termist and relied too heavily on index-tracker funds, rather than choosing stocks to invest in.<br /></p><p>The industry has overcharged in many aspects. It’s quite clear, in the banking industry and my own industry, that too often, the industry has been charging active fees for index performance or worse.</p><p>Retail clients in particular are waking up to the high charges that we’ve seen in the industry and I think, with some support from the regulator, we’re going to see those charges come down.</p><p>Neil Woodford tells <a href="https://twitter.com/EvanHD">@EvanHD</a> that he thinks Pfizer will come back for a further bid for Astra Zeneca <a href="https://twitter.com/BBCr4today">@BBCr4today</a></p><p class="block-time published-time"> <time datetime="2014-09-26T09:11:44.435+01:00">9.11am <span class="timezone">BST</span></time> </p><p>The Financial Times’ splash also caught my eye. The paper reports that European regulators are planing to clamp down on banks that attempt to sidestep the bankers’ bonus cap by paying their top staff allowances. </p><p>Stuart Gulliver, chief executive of HSBC gets an allowance worth &pound;32,000 a week – on top of his &pound;1.2m salary, to get around the EU’s cap on bonuses. Many other big banks have followed suit with similar deals for their staff.<br /></p><p>If the draft is adopted and enforced by UK authorities, banks including HSBC, Barclays and Goldman Sachs will be forced to rethink their allowance regimes ..</p><p class="block-time published-time"> <time datetime="2014-09-26T08:54:39.449+01:00">8.54am <span class="timezone">BST</span></time> </p><p>From today’s Daily Telegraph<br /></p><p>Buy-to-let borrowers face new costs and limits - <a href="http://t.co/mj8R4JiqZU">http://t.co/mj8R4JiqZU</a> <a href="https://twitter.com/holly_watt">@holly_watt</a> <a href="https://twitter.com/hashtag/frontpages?src=hash">#frontpages</a></p><p class="block-time published-time"> <time datetime="2014-09-26T08:24:47.966+01:00">8.24am <span class="timezone">BST</span></time> </p><p>Banknote analogies are hard to resist when it comes to De La Rue’s profit warning.<br /></p><p>De La Rue shares down 26% after profit warning - that's a very big pile of freshly printed &pound;50 notes that has been set on fire! <a href="https://twitter.com/hashtag/DLAR?src=hash">#DLAR</a></p><p class="block-time published-time"> <time datetime="2014-09-26T08:20:56.463+01:00">8.20am <span class="timezone">BST</span></time> </p><p>Apparently it doesn’t always pay to be in the business of printing money.</p><p>De La Rue, which prints pounds sterling for the Bank of England, is suffering a rout on the markets this morning after issuing a dramatic profits warning.</p><p>The challenging market conditions reported at the AGM have deteriorated further with lower prices and reduced margins in both banknote print and paper.</p><p> Based on recent orders and current trends within both the Currency and Solutions divisions the Board expects the current difficult market conditions to continue in the 2015/16 financial year. <br /></p><p class="block-time published-time"> <time datetime="2014-09-26T08:06:54.271+01:00">8.06am <span class="timezone">BST</span></time> </p><p><strong>Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and the business world.</strong></p><p>European markets are set for a mixed day of trading, following a sharp sell off in Asia this morning.</p><p>If there’s confirmation regarding a proposed piece of legislation in Russia to allow foreign asset-seizure; the DAX with Germany’s strong Russian trading ties and the FTSE 100 with the UK’s large energy-investment in Russia could see another bout of selling. </p> <a href="http://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-live">Continue reading...</a>JapanEuropeRussiaEconomic growth (GDP)Asia PacificEconomicsFri, 26 Sep 2014 16:51:56 GMThttp://www.theguardian.com/business/blog/live/2014/sep/26/markets-asian-stocks-fall-inflation-apple-gdp-livePhotograph: Giannis Papanikos/Giannis Papanikos/Demotix/CorbisProtests by public sector workers in Thessaloniki this week. Photo: Giannis Papanikos/Demotix/CorbisPhotograph: Giannis Papanikos/Giannis Papanikos/Demotix/CorbisProtests by public sector workers in Thessaloniki this week. Photo: Giannis Papanikos/Demotix/CorbisPhotograph: JIM YOUNG/REUTERSBill Gross, co-founder and co-chief investment officer of Pacific Investment Management Company (PIMCO), at the Morningstar Investment Conference in Chicago, Illinois, in June. Jim Young/ReutersPhotograph: JIM YOUNG/REUTERSBill Gross, co-founder and co-chief investment officer of Pacific Investment Management Company (PIMCO), at the Morningstar Investment Conference in Chicago, Illinois, in June. Jim Young/ReutersPhotograph: Stephen Brashear/Getty ImagesA Dreamliner pictured at Boeing Field in Seattle, Washington. Stephen Brashear/Getty ImagesPhotograph: Stephen Brashear/Getty ImagesA Dreamliner pictured at Boeing Field in Seattle, Washington. Stephen Brashear/Getty ImagesPhotograph: KAI PFAFFENBACH/REUTERSGraffiti depicting German Chancellor Angela Merkel is sprayed on a fence surrounding the construction site for the new headquarters of the European Central Bank (ECB) in Frankfurt, Kai Pfaffenbach/ReutersPhotograph: KAI PFAFFENBACH/REUTERSGraffiti depicting German Chancellor Angela Merkel is sprayed on a fence surrounding the construction site for the new headquarters of the European Central Bank (ECB) in Frankfurt, Kai Pfaffenbach/ReutersPhotograph: GfK GroupGerman consumer confidence worsened for the second successive month in September.Photograph: MAXIM ZMEYEV/REUTERSThe rouble fell on Friday, exceeding a historic low touched in mid September (pictured). Maxim Zmeyev/ReutersPhotograph: MAXIM ZMEYEV/REUTERSThe rouble fell on Friday, exceeding a historic low touched in mid September (pictured). Maxim Zmeyev/ReutersPhotograph: Adam Berry/Getty ImagesShoppers attend the opening of the Mall of Berlin on Thursday. Adam Berry/Getty ImagesPhotograph: Adam Berry/Getty ImagesShoppers attend the opening of the Mall of Berlin on Thursday. Adam Berry/Getty ImagesJennifer Rankin and Nick Fletcher2014-09-26T16:51:56ZIMF warns Japan may need more forceful reforms to avoid sinking back into deflation -- Business Livehttp://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-live
<p>Rolling economic and business news, including the International Monetary Fund urging Japan to take more aggressive steps to avoid Abenomics failing.</p><ul><li><a href="http://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-live?view=desktop#block-5388269ae4b0938bbfa321b4">IMF: Greater structural and fiscal reforms are needed</a> &lt;- new readers start here<br></li><li><a href="http://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-live?view=desktop#block-5388333fe4b0a3a035d81d85">David Lipton: Japan must become more competitive</a></li><li>Inflation jumps (but it's all about the sales tax)<br></li><li>BNP Paribas shares tumble</li><li><a href="http://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-live?view=desktop#block-53882168e4b0a3a035d81d7a">Today's agenda</a><br></li></ul><p class="block-time published-time"> <time datetime="2014-05-30T16:55:13.612+01:00">4.55pm <span class="timezone">BST</span></time> </p><p>European stock markets have ended the week on a quiet note, with the FTSE 100 index in London closing down 26.78 points, or 0.39%, at 6844.51, dragged down by mining stocks such as Anglo American and Rio Tinto. Germany's Dax edged up 4.37 points to 9943.27 while France's CAC lost 10.94 points, or 0.2%, to 4519.57. Spain's Ibex rose nearly 70 points to 10798.7, a 0.6% gain, and Italy's FTSE MIB added 118.36 points, or 0.55%, to 21629.71. </p><p>On Wall Street, the Dow Jones was trading down nearly 18 points at 16681.21, a 0.1% fall, while the S&amp;P 500 was flat at 1921.40 and the Nasdaq was also little changed at 4245.92. The dollar slipped against other major currencies as traders tidied up their books at the end of the month, and ahead of next week's European Central Bank meeting.<br /></p><p class="block-time published-time"> <time datetime="2014-05-30T16:12:44.443+01:00">4.12pm <span class="timezone">BST</span></time> </p><p><b>The latest growth figures from India</b> have underlined the challenge facing its new government.</p><p>GDP rose by an annual rate of 4.6% in the first three months of 2014:</p><p><a href="https://twitter.com/search?q=%23India&amp;src=hash">#India</a>'s economy grew by 4.6% in the first three months of 2014. <a href="https://twitter.com/search?q=%23Underwhelming&amp;src=hash">#Underwhelming</a> <a href="http://t.co/d7ifH2ZiMU">http://t.co/d7ifH2ZiMU</a> <a href="http://t.co/ysOhBMjLSI">pic.twitter.com/ysOhBMjLSI</a></p><p class="block-time published-time"> <time datetime="2014-05-30T16:05:02.069+01:00">4.05pm <span class="timezone">BST</span></time> </p><p>Time for a quick recap, with links to the main points in the blog.</p><p><b><a href="http://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-live?view=desktop#block-5388269ae4b0938bbfa321b4">The International Monetary Fund has urged Tokyo's government to consider bolder fiscal stimulus measures, to avoid Japan's Abenomics programme faltering</a></b>.</p><p class="block-time published-time"> <time datetime="2014-05-30T15:41:12.590+01:00">3.41pm <span class="timezone">BST</span></time> </p><p><b>It's not been a great week for goldbugs</b>.<br /></p><p class="block-time published-time"> <time datetime="2014-05-30T15:15:06.349+01:00">3.15pm <span class="timezone">BST</span></time> </p><p>A quiet start to trading on Wall Street has seen the main indices fall slightly in early trading. </p><p>Here's the situation:</p><p>Who ever sold in May and went away should stay away</p><p>At the risk of sounding like a broken record, markets are very toppy and a reversion remains a case of &quot;when&quot; not &quot;if&quot;.</p><p class="block-time published-time"> <time datetime="2014-05-30T14:46:42.114+01:00">2.46pm <span class="timezone">BST</span></time> </p><p>JD Sports' departing CEO Barry Bown will be spending more time with his golf clubs, reports my colleague <b>Sarah Butler</b>:<br /></p><p>Barry Bown from JD will be stepping down as chief executive with a pay-off to become a consultant to the business.</p><p>In a typically quirky move from the sports retailer, Bown will practice his golf a couple of extra days a week but continue to advise on business development while the heads of JD Group's several retail chains will report directly into chairman Peter Cowgill as they have been doing for 18 months anyway.</p><p class="block-time published-time"> <time datetime="2014-05-30T14:18:16.443+01:00">2.18pm <span class="timezone">BST</span></time> </p><p>JD Sport shares have fallen 1% following the news that CEO Barry Bown is leaving.</p><p class="block-time published-time"> <time datetime="2014-05-30T14:07:26.414+01:00">2.07pm <span class="timezone">BST</span></time> </p><p>BREAKING: JD Sports chief executive Barry Bown is stepping down with immediate effect. He has been with the sports retailer since 1984</p><p class="block-time published-time"> <time datetime="2014-05-30T14:05:29.016+01:00">2.05pm <span class="timezone">BST</span></time> </p><p><b>Just in -- the boss of JD Sports has resigned with immediate effect.</b></p><p>The high street retailer told shareholders that Barry Bown is stepping down after &quot;30 years of significant contribution to the growth and development of the Company&quot;. </p><p>&quot;The Board would like to thank Barry for his valued and considerable contribution to the growth and progress of the business. We look forward to his continued support as a consultant to the Company.&quot;</p><p class="block-time published-time"> <time datetime="2014-05-30T13:51:18.384+01:00">1.51pm <span class="timezone">BST</span></time> </p><p>We learned yesterday that the US economy shrank for the first time in three years between January and March.</p><p>And the latest consumer spending data has dampened hopes that growth will surge back in this quarter. </p><p class="block-time published-time"> <time datetime="2014-05-30T13:25:46.585+01:00">1.25pm <span class="timezone">BST</span></time> </p><p><b>The boss of Kingfisher, which owns the home improvements chain B&amp;Q, has said today that investment in Scotland would be frozen if it votes to break away from the rest of the UK.</b></p><p>Sir Ian, speaking at his newest B&amp;Q warehouse in Port Glasgow, Inverclyde, insisted he will not pull out if Scots decide to leave the union. </p><p>But he said: &quot;It would put a pause on everything. </p><p>He would have to &quot;wait and see&quot; if conditions were good enough to open more stores, including plans to take the number of Screwfix outlets up to 50 in Scotland. </p><p>&quot;Those may or may not happen as a result,&quot; he said.</p><p>&quot;Technically, the UK is part of the EU and if you leave the UK you will have to reapply...</p><p>&quot;I spend a lot of time in Brussels and I've been told this consistently by a large number of people. </p><p class="block-time published-time"> <time datetime="2014-05-30T12:33:23.198+01:00">12.33pm <span class="timezone">BST</span></time> </p><p><b>Missed this earlier -- but Sweden's economy has suffered a small, surprise contraction, hit by a deteriorating net trade balance.</b></p><p>“If one looks at the components, for example investments and exports, they were better than we had expected. Household consumption continues to push on so if one looks at the demand components things look pretty good.”</p><p class="block-time published-time"> <time datetime="2014-05-30T12:05:53.763+01:00">12.05pm <span class="timezone">BST</span></time> </p><p>A reminder of how BNP Paribas is facing the biggest fine yet for busting US sanctions.</p><p>BNP <a href="https://twitter.com/search?q=%23Paribas&amp;src=hash">#Paribas</a> might have to pay over $10 billion for allegedly violating U.S. sanctions. <a href="http://t.co/0txdHllVsm">http://t.co/0txdHllVsm</a> <a href="http://t.co/rZDwQXY5ZS">pic.twitter.com/rZDwQXY5ZS</a> <a href="https://twitter.com/search?q=%23USA&amp;src=hash">#USA</a></p><p class="block-time published-time"> <time datetime="2014-05-30T11:28:42.270+01:00">11.28am <span class="timezone">BST</span></time> </p><p>Speaking of the European Central Bank, <a href="http://ftalphaville.ft.com/2014/05/30/1865792/ah-i-see-we-are-firmly-in-the-what-if-qe-fails-stage-of-the-debate/">David Keohane of Alphaville has written a piece about the options which its governing council could deploy next week's policy-setting meeting</a>.</p><p>It shows that most analyst expect interest rate cuts, but only a handful believe the ECB will embark on a quantitative easing programme:</p><p class="block-time published-time"> <time datetime="2014-05-30T11:25:23.835+01:00">11.25am <span class="timezone">BST</span></time> </p><p><b>Th old mantra of &quot;Sell in May and Go Away&quot; didn't really work out this year, with the FTSE 100 up around 70 points, or 1.1%, this month.</b></p><p>That's partly thanks to a string of record highs on Wall Street, and partly due to speculation of new stimulus measures by the European Central Bank next week.</p><p>A fresh record high for the S&amp;P 500 has failed to enthuse London markets, as some worrying news from China sent miners lower. </p><p>Chinese government figures indicated manufacturing growth was weakening, contradicting recent signs of improvement in the economy and providing an excuse for some selling in raw materials. In addition, a profit warning from Fenner served as a reminder that the situation is not entirely rosy. Warnings seem to be coming through with disturbing regularity, and the sharp drops in share prices that follow suggest that investor sentiment is far from being rock solid. Even now, many are uncomfortable with valuations at current levels, a signal that the push towards 6900 is likely to be delayed once again.</p><p class="block-time published-time"> <time datetime="2014-05-30T10:16:11.658+01:00">10.16am <span class="timezone">BST</span></time> </p><p><b>Greek retail sales have fallen again</b> - with volumes falling 0.8% year-on-year in March as the country's long recession continues to hit shoppers.</p><p>ELSTAT, the country's stats body, also revised February's data to show a welcome 0.9% rise in sales volumes.</p><p class="block-time published-time"> <time datetime="2014-05-30T09:50:51.741+01:00">9.50am <span class="timezone">BST</span></time> </p><p><b>UK retailer John Lewis </b>continues to enjoy a good May - sales across the chain jumped by 14.2% last week, compared to a year ago.</p><p>Consumer confidence <a href="http://www.marketwatch.com/story/uk-consumer-confidence-hits-nine-year-high-2014-05-29-234855738?link=MW_latest_news">hit a nine-month high this month</a>; and IHS's Howard Archer reckons the trend will continue -- if real wages outpace inflation this year.</p><p>The fundamentals for consumers are currently improving overall, and they should continue to do so over the coming months as employment continues to rise and earnings growth likely trends higher than inflation.</p><p>GfK-NOP UK consumer confidence up 3 points in May, 27 points since April 2013. Highest for nine years, bIggest rise for 37 years.</p><p class="block-time published-time"> <time datetime="2014-05-30T09:42:51.627+01:00">9.42am <span class="timezone">BST</span></time> </p><p>A profits warning from FTSE 250-firm Fenner (maker of conveyer belts to the mining industry) has helped knock shares in London this morning.</p><p>Mining firms are leading the FTSE 100 fallers, after Fenner warned that weakness in the U.S. coal sector meant it would miss earnings targets.</p><p class="block-time published-time"> <time datetime="2014-05-30T09:25:06.538+01:00">9.25am <span class="timezone">BST</span></time> </p><p>Overnight, Greece's opposition leader <b>Alexis Tsipras</b> has emphatically ruled out an alliance in the European Parliament with Britain's Nigel Farage.</p><p>Tsipras said groups such as UK Independence Party and France's National Front party were “monstrosities” created by Europe's drive into austerity, calling his Syriza party an &quot;oasis&quot;.</p><p>&quot;We are a pro-European force that wants to change Europe, not dismantle it.</p><p>“Austerity has led to the creation of political monstrosities.”</p><p><a href="https://twitter.com/search?q=%23Syriza&amp;src=hash">#Syriza</a>'s <a href="https://twitter.com/search?q=%23Tsipiras&amp;src=hash">#Tsipiras</a>: “We are a pro-European force that wants to change Europe, not dismantle it.” <a href="https://twitter.com/search?q=%23Greece&amp;src=hash">#Greece</a></p><p class="block-time published-time"> <time datetime="2014-05-30T09:21:13.703+01:00">9.21am <span class="timezone">BST</span></time> </p><p>The Bank of France says it is following the<a href="http://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-live?view=desktop#block-5388349ee4b0fc929a2a8427"> US Justice Department sanctions busting case against BNP Paribas</a> with the &quot;utmost attention&quot;.</p><p>A spokeswoman said:</p><p>&quot;The Bank of France has no comment to make for now since negotiations are still in progress. The governor of the Bank of France is following this case with the utmost attention.&quot;</p><p class="block-time published-time"> <time datetime="2014-05-30T08:57:43.549+01:00">8.57am <span class="timezone">BST</span></time> </p><p><b>Back to the International Monetary Fund's worries about Japan (<a href="http://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-live?view=desktop#block-5388269ae4b0938bbfa321b4">details here</a>)</b>, and the Fund's deputy managing director, David Lipton, has warned that parts of the Japanese economy are under-performing.</p><p>&quot;If anything, we've been seeing Japan experiencing slower export growth than Japan had expected and we had expected,&quot; </p><p>&quot;There's a need for Japan to strengthen its competitiveness. So we don't believe that strengthening of the yen at this point would be helpful because that would go in an opposite direction from that important need.&quot; </p><p class="block-time published-time"> <time datetime="2014-05-30T08:42:01.763+01:00">8.42am <span class="timezone">BST</span></time> </p><p>Shares in <b>French bank BNP Paribas</b> have tumbled over 5% in Paris, as traders rush to sell following reports that it could be fined <b>$10bn</b> by US authorities for breaking sanctions.</p><p>*BNP PARIBAS SHARES FALL 5.4% TO EU49.8 IN PARIS TRADING <a href="http://t.co/132AFnUs7y">http://t.co/132AFnUs7y</a></p><p>European banks have been the target of many of the recent U.S. fines. The pursuit, with cumulative penalties in the ballpark of $10 billion, has triggered private grumbling among European finance executives and some regulators there. The mounting frustration helps explain why some French leaders appear to be rallying around BNP. Christian Noyer, the governor of the Bank of France, said this month that BNP's alleged actions didn't violate European or French laws.</p><p>A final resolution of the yearslong U.S. investigation of the French bank is likely weeks away, and it is possible the ultimate settlement amount could total far less than $10 billion. BNP is looking to pay less than $8 billion, according to the people familiar with the settlement discussions, although a person close to the bank said its negotiators haven't mentioned the $8 billion figure in talks with U.S. authorities.</p><p class="block-time published-time"> <time datetime="2014-05-30T08:28:30.925+01:00">8.28am <span class="timezone">BST</span></time> </p><p>Friday has started well for <b>Latvia</b> -- Standard &amp; Poor's raised its credit rating by one notch to A- (the seventh highest rating) this morning.</p><p><a href="http://www.bloomberg.com/news/2014-05-30/latvian-credit-rating-raised-by-s-p-on-euro-adoption-lower-debt.html">S&amp;P cited Latvia's strong growth prospects, membership of the euro-area and falling government debt (as a percentage of GDP)</a>. </p><p class="block-time published-time"> <time datetime="2014-05-30T08:25:23.842+01:00">8.25am <span class="timezone">BST</span></time> </p><p><b>Another reason to be worried about Japan - factory output fell 2.5% month-on-month in April</b>. </p><p>That dashed hopes of growth, with the ministry of economy, trade and industry warning that &quot;production appears to be flat&quot; at present.</p><p class="block-time published-time"> <time datetime="2014-05-30T08:17:30.969+01:00">8.17am <span class="timezone">BST</span></time> </p><p><b>Ironically, the IMF's warning comes as Japan's core inflation rate hit 3.2% in April</b>.</p><p>But... that's because Tokyo hikes its sales tax last month, from 5% to 8%. If you strip that out, then inflation rose by just 1.5% -- still shy of Japan's target of 2%.</p><p class="block-time published-time"> <time datetime="2014-05-30T08:07:40.210+01:00">8.07am <span class="timezone">BST</span></time> </p><p><b>Is Abenomics - Japan's great hope for a return to growth - running out of steam?</b></p><p>Over the medium term, transitioning to self-sustaining growth requires greater structural and fiscal reform efforts to avoid slipping back into deflation, overburdening monetary policy, and undermining confidence in the sustainability of government debt.</p><p>Because of further declines in the working-age population due to aging, staff projects potential growth to remain below 1 percent over the medium term</p><p>The BoJ should act quickly if actual or expected inflation stagnates or growth disappoints.</p><p class="block-time published-time"> <time datetime="2014-05-30T08:07:00.801+01:00">8.07am <span class="timezone">BST</span></time> </p><p><b>Good morning, and welcome to our rolling coverage of the financial markets, economics, business and the eurozone.</b></p><p>3 reasons to be cheerful <a href="https://twitter.com/CBItweets">@CBItweets</a> Economic growth at 10 year high, <a href="https://twitter.com/britishchambers">@britishchambers</a> upgrades growth forecast, <a href="https://twitter.com/GfK_en">@GfK_en</a> sees confidence soar</p> <a href="http://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-live">Continue reading...</a>Eurozone crisisBusinessJapanInternational Monetary Fund (IMF)LatviaGermanyEuroFinancial sectorFri, 30 May 2014 16:04:36 GMThttp://www.theguardian.com/business/blog/2014/may/30/imf-warns-japan-may-need-more-forceful-reforms-to-avoid-deflation-livePhotograph: Jonathan Nourok/Getty ImagesPhotograph: Jonathan Nourok/Getty ImagesPhotograph: Jonathan Nourok/Getty ImagesPhotograph: Jonathan Nourok/Getty ImagesPhotograph: AlamyThe harbour at Fjällbacka on Sweden's Bohüslan coast. Photograph: AlamyPhotograph: AlamyThe harbour at Fjällbacka on Sweden's Bohüslan coast. Photograph: AlamyPhotograph: Thomson ReutersBNP Paribas share price over the last week, including this morning's plunge. Photograph: /Thomson ReutersPhotograph: Stefan Rousseau/PAThe 'Gherkin' and Canary Wharf at sunrise in the City of London. Photograph: Stefan Rousseau/PAPhotograph: Stefan Rousseau/PAThe 'Gherkin' and Canary Wharf at sunrise in the City of London. Photograph: Stefan Rousseau/PAPhotograph: YUYA SHINO/REUTERSA factory in Tokyo, Japan, where last month's sales tax hike has pushed inflation up. Photograph: YUYA SHINO/REUTERSPhotograph: YUYA SHINO/REUTERSA factory in Tokyo, Japan, where last month's sales tax hike has pushed inflation up. Photograph: YUYA SHINO/REUTERSGraeme Wearden2014-05-30T16:04:36ZBusiness Live: US economy shrinks for first time in three yearshttp://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live
<p>American growth figures revised to show GDP fell by an annualised rate of 1.0% in Q1 as companies cut back on investment and restocking their inventories<br></p><ul><li><a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-53872883e4b07b701cbcabc3">US GDP - coverage starts here</a><br></li><li><a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-53873091e4b07b701cbcabc8">Analysts say: don't panic</a></li><li><a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-538736e1e4b0a1efcbc04a29">S&amp;P 500 hits fresh record high</a></li><li><a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-5387263ae4b0a1efcbc04a22">Lunchtime summary: Lagarde demands action on African poverty</a><br></li></ul><p class="block-time published-time"> <time datetime="2014-05-29T16:20:48.510+01:00">4.20pm <span class="timezone">BST</span></time> </p><p>And that's all for today.</p><p><b><a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-53872883e4b07b701cbcabc3">Rolling coverage of the US GDP data starts at 1.30pm BST</a></b>, with analysis and reaction to the news that America's economy has shrunk for only the second time since 2009.</p><p class="block-time published-time"> <time datetime="2014-05-29T16:16:29.817+01:00">4.16pm <span class="timezone">BST</span></time> </p><p>A handy bar chart:</p><p>Recovery! U.S. economy shrank 1% in fourth quarter, revised data show. <a href="http://t.co/QRqS3qofZl">http://t.co/QRqS3qofZl</a> <a href="http://t.co/g8hAf0zLvn">pic.twitter.com/g8hAf0zLvn</a></p><p class="block-time published-time"> <time datetime="2014-05-29T16:10:42.915+01:00">4.10pm <span class="timezone">BST</span></time> </p><p><b>Back in Greece,</b> there is another protest underway. This time in the city of Thessaloniki.</p><p>School caretakers, teachers and staff from state broadcaster ERT (closed down last summer) have joined with cleaning staff who are demanding their jobs back.</p><p>Now in Thessaloniki center: protest by laid-off cleaners, school guards, <a href="https://twitter.com/search?q=%23ert&amp;src=hash">#ert</a> workers, teachers TR <a href="https://twitter.com/gazakas">@gazakas</a> <a href="https://twitter.com/search?q=%23skg&amp;src=hash">#skg</a> <a href="http://t.co/uGNFwZIEFR">pic.twitter.com/uGNFwZIEFR</a></p><p class="block-time published-time"> <time datetime="2014-05-29T16:02:58.673+01:00">4.02pm <span class="timezone">BST</span></time> </p><p><b>Back on Wall Street</b>, the interest rate (yield) on 10-year US Treasury bills (US debt) has fallen to the lowest level in almost a year.</p><p>Investors continue to push up the price of Treasuries (yields fall when the value of the bonds goes up), defying expectations that they would rise as the US Federal Reserve wound in its bond-buying programme.</p><p>Bond investors 'take the rough with the smooth' on GDP, jobless. 10-year yield at 11-mth low. <a href="http://t.co/eBGx2xoTYy">http://t.co/eBGx2xoTYy</a> <a href="http://t.co/sgUNEkhLQp">pic.twitter.com/sgUNEkhLQp</a></p><p>Not sure I remember a positioning pain trade like Treasuries right now.</p><p class="block-time published-time"> <time datetime="2014-05-29T15:57:31.764+01:00">3.57pm <span class="timezone">BST</span></time> </p><p>Better late than never (sorry!) - here's <b><a href="http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm">a link to the news release from the BEA</a></b>, explaining that US GDP shank by an annual rate of 1.0% last quarter.</p><p>In it, the BEA says:</p><p>The downturn in the percent change in real GDP primarily reflected a downturn in exports, a larger decrease in private inventory investment, and downturns in nonresidential fixed investment and in state and local government spending that were partly offset by an upturn in federal government spending.</p><p class="block-time published-time"> <time datetime="2014-05-29T15:40:13.063+01:00">3.40pm <span class="timezone">BST</span></time> </p><p>This is only the second time since 2009 that the US economy has contracted, as this chart shows:</p><p>On two occasions during 2012 and 2013, US GDP looked likely to see a return to sustained growth, before slumping again.</p><p> The Federal Reserve will be hoping that we are not seeing a repeat of that. Its Chair Janet Yellen blamed the latest slowdown on transitory factors, especially the weather; however, her tendency to manage expectations through speeches is in this case intended to reassure markets that the fundamentals of US growth are sound.</p><p class="block-time published-time"> <time datetime="2014-05-29T15:30:19.388+01:00">3.30pm <span class="timezone">BST</span></time> </p><p>I mentioned earlier that recent US data has been quite positive.</p><p> Well, Chris Williamson of Markit has tweeted a graph showing that Markit's PMI surveys (which interview firms across America) suggest growth will rebound strongly in the April-June quarter:</p><p>Markit US PMI surveys (up to May) are pointing to a strong rebound in Q2 after <a href="https://twitter.com/search?q=%23GDP&amp;src=hash">#GDP</a> fell 1.0% annualised in Q1 <a href="http://t.co/dGgevLhK4y">pic.twitter.com/dGgevLhK4y</a></p><p class="block-time published-time"> <time datetime="2014-05-29T15:20:06.899+01:00">3.20pm <span class="timezone">BST</span></time> </p><p>Another photo from the archives, reminding us that America took a serious hit from the weather over the winter:</p><p class="block-time published-time"> <time datetime="2014-05-29T14:38:09.292+01:00">2.38pm <span class="timezone">BST</span></time> </p><p><b>On Wall Street</b>, traders have reacted to the unexpectedly large fall in US GDP by, er, driving shares up to new record levels.</p><p>The S&amp;P 500 has hit yet another record intraday high in the opening action in New York.</p><p>S&amp;P hits new intraday high for 3rd consecutive day. <a href="https://twitter.com/CNBC">@CNBC</a> <a href="https://twitter.com/search?q=%24SPX&amp;src=ctag">$SPX</a></p><p class="block-time published-time"> <time datetime="2014-05-29T14:32:10.819+01:00">2.32pm <span class="timezone">BST</span></time> </p><p><b>Here's economics editor Larry Elliott's early take:</b></p><p>The US economy contracted for the first time in three years in early 2014 after a much worse performance than originally feared.</p><p>Washington's commerce department said the world's biggest economy shrank at an annual rate of 1% during the first quarter – a period marked by an unusually harsh winter in some of the more populous states.</p><p class="block-time published-time"> <time datetime="2014-05-29T14:29:59.664+01:00">2.29pm <span class="timezone">BST</span></time> </p><p><b>Dan Greenhaus</b>, chief strategist at BTIG, agrees that the contraction in US economic activity in the last quarter is a one-off.<br /></p><p>He told clients:</p><p>&quot;The second estimate of GDP is backward looking,</p><p>We knew that weather dramatically impacted growth in the first quarter, and we fully expect a bounce back in the second quarter.&quot;</p><p class="block-time published-time"> <time datetime="2014-05-29T14:27:07.024+01:00">2.27pm <span class="timezone">BST</span></time> </p><p>A reminder of how bad last winter was in North America -- Niagara Falls froze....</p><p class="block-time published-time"> <time datetime="2014-05-29T14:22:36.265+01:00">2.22pm <span class="timezone">BST</span></time> </p><p><b><br />Don't panic, says Capital Economics.</b></p><p>Their chief US economist, <b>Paul Ashworth,</b> reckons the surprisingly large fall in US GDP is just a blip. He expects to see growth roaring back in the current quarter:.</p><p>For a start, the downward revision is almost entirely because inventories were a much bigger drag on growth than previously thought. Inventories subtracted 1.6% from overall GDP growth in the second estimate, compared with a more modest 0.6% in the first estimate. But that bigger first-quarter drag means that we are likely to see a bigger bounce back in the second quarter.</p><p>More generally, the first-quarter contraction was quite obviously due to the unusually severe winter. It hit durable goods consumption, residential investment, business investment in non-residential structures and exports. But the incoming monthly data already point to a marked turnaround in the second quarter. For those worried about a recession, it's worth remembering that employment increased by nearly 300,000 in April and jobless claims dropped to 300,000 last week [<a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-538732b8e4b0a1efcbc04a23">as flagged at 2.20pm</a>]. Those numbers point to a recovery gathering some real momentum at last. We still expect second-quarter GDP growth to come in close to 3.5%.</p><p class="block-time published-time"> <time datetime="2014-05-29T14:20:24.654+01:00">2.20pm <span class="timezone">BST</span></time> </p><p><b>There is good news for the US economy too </b>-- the number of people filing new jobless claims fell to just 300,000 last week, down from 327,000.</p><p>And the continued claims figure (those who had been claiming for more than a week) slid to 2.631m, the lowest level since November 2007.</p><p class="block-time published-time"> <time datetime="2014-05-29T14:04:50.617+01:00">2.04pm <span class="timezone">BST</span></time> </p><p>The fall in America's GDP is mainly due to companies <b>cutting back on investment</b>, particularly in new buildings, and holding back from <b>restocking their warehouses, </b>tweets Deutsche Bank's <b>Joseph LaVorgna</b>:<br /></p><p>Q1 <a href="https://twitter.com/search?q=%23GDP&amp;src=hash">#GDP</a> was revised down to -1.0% from +0.1% previously, close to our expectations, because of weaker inventories and construction.</p><p class="block-time published-time"> <time datetime="2014-05-29T13:58:51.065+01:00">1.58pm <span class="timezone">BST</span></time> </p><p>It's worth remembering that recent economic data from the US has been quite encouraging -- meaning economists are confident that the contraction in January-March was temporary. </p><p>Here's Associated Press's early take:</p><p>The Commerce Department says that the economy contracted at an annual rate of 1% in the first quarter, worse than the government's initial estimate a month ago that the economy grew by a barely discernible 0.1% in the first quarter. </p><p>It was the economy's first quarterly decline since a 1.3% drop in the first three months of 2011.</p><p class="block-time published-time"> <time datetime="2014-05-29T13:56:00.139+01:00">1.56pm <span class="timezone">BST</span></time> </p><p><b>So why did the US economy contract so sharply in the first three months of this year?</b></p><p>Today's data suggests that American firms were hit even harder by the awful wintery weather than first thought, as storms and icy blizzards ate into economic activity across the world's largest economy.</p><p>Composition of Q1'14 GDP strongly suggests the decline in output extended beyond transitory issues associated with a difficult winter.</p><p class="block-time published-time"> <time datetime="2014-05-29T13:40:31.484+01:00">1.40pm <span class="timezone">BST</span></time> </p><p>Economists had predicted that the US economy would have contracted in the first quarter (as recent economic data has been weak). But no-one expected a full 1.0% drop in annualised GDP:</p><p>Oh <a href="https://twitter.com/ReutersJamie">@ReutersJamie</a> US economy shrank 1% in Q1, 1st contraction in 3 years. Not 1 of the 85 economists in Reuters poll thought it was that bad.</p><p class="block-time published-time"> <time datetime="2014-05-29T13:36:51.241+01:00">1.36pm <span class="timezone">BST</span></time> </p><p><b>Breaking: The US economy shrank at an annual rate of 1.0% in the first three months of 2014, the first drop in economic output in three years.</b></p><p>That's according to revised data from America's Bureau of Economic Analysis. It is a sharp downward revision from the initial estimate of 0.1% growth (<i>annualised</i>).</p><p>Q1 US GDP revised down to -1.0% annualized, misses -0.5% estimate, down from prior +0.1%, original estimate was +1.1% (gross).</p><p>Q1 US GDP revised down to -1.0% annualized, misses -0.5% estimate, down from prior +0.1%, original estimate was +1.1% (gross).</p><p class="block-time published-time"> <time datetime="2014-05-29T13:28:41.056+01:00">1.28pm <span class="timezone">BST</span></time> </p><p>A very quick round-up before the latest US growth data is released.</p><p class="block-time published-time"> <time datetime="2014-05-29T13:21:07.798+01:00">1.21pm <span class="timezone">BST</span></time> </p><p>Earlier today <b>Argentina</b> took a landmark step towards unlocking international finance, by agreeing a deal with the &quot;Paris Club&quot; of creditors over a $9.7bn unpaid debt dating back to its default in 2001.</p><p>The deal, which ends Buenos Aires's long battle against the creditors, will see Argentina repay $1.15bn by May 2015, with further payments over the next five years.</p><p>Paris Club creditors welcomed progress made by the Argentine Republic towards the normalisation of its relations with creditors, the international financial community and institutions. </p><p>Realisation of initial payment under a formal commitment of Argentina to fully clear its arrears is a necessary and important step for (this)...normalisation.</p><p class="block-time published-time"> <time datetime="2014-05-29T12:57:48.782+01:00">12.57pm <span class="timezone">BST</span></time> </p><p>Philanthropist and currency speculator <b>George Soros </b>has urged the European Union to help calm the Ukraine crisis and stimulate its economy, by giving firms &quot;political risk&quot; insurance.</p><p><a href="http://www.theguardian.com/business/2014/may/29/how-eu-can-save-ukraine-political-risk-insurance?CMP=twt_gu">Soros writes</a> that the move would encourage businesses to invest in Ukraine despite the uncertainty created since relations with Russia collapsed.</p><p>Faced with high premiums, most businesses would simply opt to wait on the sidelines until the storm passed. That is why the governments concerned must take over the reinsurance function and use their agencies only to administer the insurance policies.</p><p>They could guarantee the losses in the same way as they underwrite the World Bank: each government would provide a modest pro-rata capital infusion and commit the rest in the form of callable capital that would be available if and when losses are actually paid out.</p><p>How the EU can save Ukraine – and itself | George Soros <a href="http://t.co/LnodTg0b0i">http://t.co/LnodTg0b0i</a></p><p class="block-time published-time"> <time datetime="2014-05-29T12:21:37.083+01:00">12.21pm <span class="timezone">BST</span></time> </p><p>US fund management firm <b>Marcato Capital Management</b> has put out a statement urging <b>InterContinental Hotels</b> to engage with the mystery US rival that is reportedly keen on taking it over.</p><p>Marcato's Mick McGuire says:</p><p>Regardless of the veracity of these reports, we believe that a combination with a larger hotel operator would have compelling strategic and financial merit and represents a unique opportunity to reshape the global hospitality industry.</p><p class="block-time published-time"> <time datetime="2014-05-29T11:59:33.709+01:00">11.59am <span class="timezone">BST</span></time> </p><p>A protest is underway outside the Greek finance ministry in Athens today, led by the cleaning staff who lost their jobs in last year's austerity cuts.</p><p>They are demanding that the government complies with a court order and restores their jobs. </p><p class="block-time published-time"> <time datetime="2014-05-29T11:39:44.147+01:00">11.39am <span class="timezone">BST</span></time> </p><p><b>Andy Haldane, the Bank of England's executive director for Financial Stability, has warned that the current shareholder model - where companies put the interests of their investors over other considerations - may be driving inequality, by encouraging firms to be too short-term.</b></p><p>To some extent, this matches the stylised facts on rising inequality – rising executive and shareholder compensation and faltering real wage growth. The shareholder model may, ironically, have contributed to unfair shares.</p><p>Company Law in a number of countries, such as the UK, gives primacy to the interests of shareholders when defining the objectives of a company and its decision-making. The objectives and rights of a broader set of stakeholders, including workers, suppliers and wider society, tend to be secondary....</p><p>A set of corporate incentives which had as its fulcrum long-term company value and which more fully reflected the interests of a wider set of stakeholders might help rebalance the scales – for example, towards investing rather than distributing.</p><p>They took up the baton for the 99% in 2011. At least at first, Occupy were treated with all of the seriousness of a local student protest. But rather remarkably Occupy became a global outfit, albeit a rather loosely-fitting one. Occupy touched a moral nerve among the many. The 1%ers in Davos had inequality as their main theme this year.</p><p>Enough has already been said and written about a book bought by many, read by few and understood by even fewer. </p><p>I am guilty on all three charges. I suspect never, in the field of human endeavour, has so simple a line chart done so much to fuel the debate among so many, not just in the salons of Paris but in the Starbucks of London and New York.</p><p class="block-time published-time"> <time datetime="2014-05-29T11:10:27.466+01:00">11.10am <span class="timezone">BST</span></time> </p><p>There's a mix of reaction to today's data on the Help to Buy scheme (<a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-5386f6f2e4b078d125c3c03a">see here</a>) - some analysts reckon the data shows the mortgage guarantee scheme is having little impact; others argue the opposite.<br /></p><p>On the face of it, Help to Buy (HTB) is doing very little. 7,313 mortgages were completed in the first six months of the government’s mortgage guarantee scheme, equivalent to 1.3% of all mortgage completions. </p><p>The scheme was introduced in October and provides a government guarantee of 15% of the property value, making it easier for a mortgagor with just a 5% deposit to get a mortgage. Despite the apparently low take-up, this scheme is far from trivial. The indirect effects are much more important. Like an iceberg, the part visible above water grossly understates its true size. We expect the BoE to recommend watering down the scheme in its annual review in September.</p><p>The policy appears to be reaching the geographical parts of the market where recovery has been weakest, while accounting for only a small proportion of business in those areas where the market is more active. </p><p>On the basis of these figures, the scheme appears to be successfully reaching its target group of creditworthy borrowers who would otherwise be unable to buy until they had accumulated a more significant deposit. Lenders are always mindful of what their customers can afford.</p><p>Since October the Help to Buy mortgage scheme has supported 7,313 mortgages. Pretty small in context of 100k+ mortgage approvals a month.</p><p>With <a href="https://twitter.com/JessicaLeeMP">@JessicaLeeMP</a> to see how Help to Buy has helped nearly 28,000 people buy their own home. 85% are 1st time buyers <a href="http://t.co/qJoMi0ZKrh">pic.twitter.com/qJoMi0ZKrh</a></p><p>The question about Help To Buy is not &quot;bubble&quot;, but how many of the homes built &amp; sold through it would have been built anyway?</p><p>The question about Help To Buy is not &quot;bubble&quot;, but how many of the homes built &amp; sold through it would have been built anyway?</p><p class="block-time published-time"> <time datetime="2014-05-29T10:24:29.634+01:00">10.24am <span class="timezone">BST</span></time> </p><p>New official stats released today on the <a href="https://twitter.com/search?q=%23HelptoBuy&amp;src=hash">#HelptoBuy</a> mortgage guarantee scheme can be accessed in full on our website <a href="http://t.co/4Zj32GgnUb">http://t.co/4Zj32GgnUb</a></p><p class="block-time published-time"> <time datetime="2014-05-29T10:21:26.708+01:00">10.21am <span class="timezone">BST</span></time> </p><p><b>Back in the UK, the government has released details of how its Help To Buy mortgage subsidy scheme has been used.</b></p><p>It shows that a total of<b> 7,313</b> mortgages have been supported by the second stage of Help to Buy during the first six months of its existence, with 80% going to first-time buyers.</p><p class="block-time published-time"> <time datetime="2014-05-29T09:37:42.536+01:00">9.37am <span class="timezone">BST</span></time> </p><p>IMF Christine <a href="https://twitter.com/Lagarde">@Lagarde</a> visits Maputo, Mozambique for the <a href="https://twitter.com/search?q=%23AfricaRising&amp;src=hash">#AfricaRising</a> conference. <a href="http://t.co/fwwOc8moOO">pic.twitter.com/fwwOc8moOO</a></p><p class="block-time published-time"> <time datetime="2014-05-29T09:33:44.104+01:00">9.33am <span class="timezone">BST</span></time> </p><p><b>Christine Lagarde</b> also used <a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-5386ea8ee4b0bc2e60e18274">her speech in Mozambique</a> to urge politicians to boost female education and close the gap between boys and girls - saying it could be <b>costing the region $90bn per year in lost activity</b>.</p><p>The IMF chief said:</p><p>I know that most of the women in Africa cannot afford <em>not</em> to work. But when they do, they are mostly employed in informal activities. We all know what this means: low productivity, low incomes, low prospects. We also know the constraints: access to education, credit, and markets.</p><p>The gains to be made by overcoming these constraints are immense—particularly through girls’ education. By some estimates, the economic loss in developing countries from the education gap between girls and boys could be as high as $90 billion a year—almost as much as the infrastructure gap for the whole of Sub-Saharan Africa!</p><p class="block-time published-time"> <time datetime="2014-05-29T09:28:24.477+01:00">9.28am <span class="timezone">BST</span></time> </p><p><b>International Monetary Fund chief Christine Lagarde</b> has warned that poverty in Africa is still &quot;unacceptably high&quot;, despite almost two decades of growing &quot;growing strongly and steadily&quot;. </p><p>Economic stability has paid off. More than two-thirds of the countries in the region have enjoyed ten or more years of uninterrupted growth.</p><p>This growth has delivered a more educated population, with significant declines in infant mortality. In Benin and Madagascar, for example, primary school enrolment has increased by more than 50 percentage points. This may be from low levels, but it is still a huge improvement.</p><p>Africa building to the future—three priorities: build infrastructure, institutions, and people <a href="http://t.co/H173NingtQ">http://t.co/H173NingtQ</a> <a href="https://twitter.com/search?q=%23AfricaRising&amp;src=hash">#AfricaRising</a></p><p class="block-time published-time"> <time datetime="2014-05-29T09:19:57.003+01:00">9.19am <span class="timezone">BST</span></time> </p><p>Kingfisher is looking beyond Europe for future growth opportunities, flags up Retail Week's <b>Nicola Harrison</b>.</p><p>Kingfisher eyeing growth outside Europe.Boss Ian Cheshire says franchise model of would-be acquisition Mr Bricolage can easily be exported</p><p class="block-time published-time"> <time datetime="2014-05-29T09:02:52.019+01:00">9.02am <span class="timezone">BST</span></time> </p><p>Analysts at <b>ING</b> say today's updated US GDP data (due at 1.30pm BST) could show that America's economy contracted in the January-March period.</p><p>They're not too worried, though, as it's largely due to last winter's bad weather:</p><p>There is a clear risk of a downward revision to today's figure, which could result in the first negative reading for 3 years. However, this was heavily weather related and activity for the second quarter so far is pointing to a robust rebound.</p><p class="block-time published-time"> <time datetime="2014-05-29T08:57:26.297+01:00">8.57am <span class="timezone">BST</span></time> </p><p><a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-5386d9c0e4b03fa2a0894eb9">Kingfisher's warning that France remains a tough business environment</a> has caught the City's eye.</p><p>Retail analyst <b>Nick Bubb </b>says:<br /></p><p>France also saw some weather benefit and reported like-for-like sales up 1.6%, with improved gross margins, but investors may be disappointed to hear that the underlying French DIY market was still weak,<br /></p><p>The company is aware of a restrained economic backdrop in France, whilst gross margins suffered in the UK given the rise in demand for cheaper products and a number of sales in the period.</p><p class="block-time published-time"> <time datetime="2014-05-29T08:52:08.786+01:00">8.52am <span class="timezone">BST</span></time> </p><p><b>In other corporate news, British Gas boss Chris Weston is off to run temporary power firm Aggreko.</b></p><p>An escape from fielding flack about rising energy bills in the UK?</p><p>Centrica’s chief executive Sam Laidlaw, who has run the company since 2006, is expected to leave before the end of the year and in January the group lost its finance chief Nick Luff, who has yet to be replaced. Weston, who will not join Aggreko until next year, was reportedly interviewed to replace Laidlaw but missed out on the top job.</p><p class="block-time published-time"> <time datetime="2014-05-29T08:45:35.269+01:00">8.45am <span class="timezone">BST</span></time> </p><p>British food ingredients firm Tate &amp; Lyle has warned that America's cold spring, and &quot;prolonged and severe winter&quot; hit demand, as it <a href="http://www.investegate.co.uk/tate---38--lyle-plc--tate-/bus/final-results/20140529070000Z9304/">reports a 3% drop in sales last year</a>.</p><p>It is also suffering from tough competition in the sucralose sweetener market -- eating into profits on its Splenda sweetener.</p><p class="block-time published-time"> <time datetime="2014-05-29T08:35:19.768+01:00">8.35am <span class="timezone">BST</span></time> </p><p>Spain's statistics office has confirmed that its economy grew by 0.4% in the last quarter - in line with the initial estimate.</p><p>Spanish Q1 <a href="https://twitter.com/search?q=%23GDP&amp;src=hash">#GDP</a> confirmed at +0.4% q/q - INE</p><p class="block-time published-time"> <time datetime="2014-05-29T08:27:00.170+01:00">8.27am <span class="timezone">BST</span></time> </p><p> April was a strong month for British automobile manufacturing, with the <a href="http://www.theguardian.com/business/2014/may/29/uk-car-manufacturing-accelerates-april">number of cars made in the UK up by a fifth</a>.</p><p class="block-time published-time"> <time datetime="2014-05-29T08:22:11.850+01:00">8.22am <span class="timezone">BST</span></time> </p><p><a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live?view=desktop#block-5386d9c0e4b03fa2a0894eb9">France</a> isn't the only country where Kingfisher found it hard to grow sales. </p><p>It also reports that it racked up a loss in China in the last quarter, and blamed the slowdown in the property market:</p><p>B&amp;Q China sales were down 5.0% to &pound;68 million (-4.4% LFL) impacted by a slowing Chinese property market.</p><p>Retail losses of &pound;7 million, in what is traditionally the weakest trading quarter of the year (impacted by Chinese New Year), were broadly flat year on year, including costs developing the new format trial of around &pound;1 million. </p><p class="block-time published-time"> <time datetime="2014-05-29T08:19:08.835+01:00">8.19am <span class="timezone">BST</span></time> </p><p><b>The weakness of the French economy has hit Kingfisher, the firm behind B&amp;Q, and taken the shine off some otherwise impressive results.</b></p><p>While like-for-like sales in the UK surged by over <b>10%</b> in the last quarter, French sales only crept up by <b>1.6%</b> despite retailers benefitting from much better weather this year.</p><p>Encouraging underlying signs in the UK &amp; Poland offset by ongoing weak consumer confidence in France</p><p class="block-time published-time"> <time datetime="2014-05-29T08:05:35.130+01:00">8.05am <span class="timezone">BST</span></time> </p><p><b>The big news overnight is that Japanese retail sales took a real tumble last month, as the country's sales tax hit consumers.</b></p><p>Japanese retail sales fell by 4.4% on an annual basis in April, the biggest fall in three years (since the Fukushima disaster), as people cut back on purchases of cars and electronics.</p><p>In one encouraging sign, declines in sales of apparel and toiletries were limited, which suggests consumer spending will pick up in May in line with the Bank of Japan's scenario, but there are worries that a recovery in durable goods could take more time. </p><p>&quot;There are signs that declines in spending on daily necessities is already bottoming out, which supports a gradual recovery in spending,&quot; said Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities. </p><p class="block-time published-time"> <time datetime="2014-05-29T08:04:09.852+01:00">8.04am <span class="timezone">BST</span></time> </p><p><b>Good morning, and welcome to our rolling coverage of the financial market, the world economy, the eurozone and business.</b></p><p>Lots of corporate news knocking around this morning -- with results from retail chain <b>Kingfisher</b>, sugar-maker <b>Tate &amp; Lyle</b> and water firm <b>Severn Trent</b>.</p><p>Just published: front page of the Financial Times UK edition Thu May 29 <a href="http://t.co/82iTlK0U6M">pic.twitter.com/82iTlK0U6M</a></p><p><b>Bond prices continued to rise yesterday</b>, but this time it wasn’t just US, UK and German bonds that were in demand but peripheral bonds as well. </p><p>US treasuries hit their lowest yield since July last year while both German bunds and UK gilts headed back towards their 10 month lows set earlier this month. </p> <a href="http://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-live">Continue reading...</a>Eurozone crisisEconomicsJapanKingfisherBusinessThu, 29 May 2014 15:20:48 GMThttp://www.theguardian.com/business/2014/may/29/japanese-retail-sales-kingfisher-france-us-gdp-livePhotograph: CEBRPhotograph: CEBRPhotograph: CEBRPhotograph: CEBRPhotograph: Dan Cappellazzo / Barcroft USA/Dan Cappellazzo / Barcroft USAPhotograph: Dan Cappellazzo/Barcroft USAPhotograph: Dan Cappellazzo / Barcroft USA/Dan Cappellazzo / Barcroft USAPhotograph: Dan Cappellazzo/Barcroft USAPhotograph: Bloomberg/via Getty ImagesPhotograph: Bloomberg/via Getty ImagesPhotograph: Bloomberg/via Getty ImagesPhotograph: Bloomberg/via Getty ImagesPhotograph: Christopher Furlong/Getty ImagesA housing development on May 20, 2014 in Middlewich, England. Photograph: Christopher Furlong/Getty ImagesPhotograph: Christopher Furlong/Getty ImagesA housing development on May 20, 2014 in Middlewich, England. Photograph: Christopher Furlong/Getty ImagesPhotograph: BRENDAN SMIALOWSKI/AFP/Getty ImagesCapitol Hill in Washington, DC. Photograph: BRENDAN SMIALOWSKI/AFP/Getty ImagesPhotograph: BRENDAN SMIALOWSKI/AFP/Getty ImagesCapitol Hill in Washington, DC. Photograph: BRENDAN SMIALOWSKI/AFP/Getty ImagesGraeme Wearden2014-05-29T15:20:48ZInflation falls to 1.9%, below Bank of England's target - as it happenedhttp://www.theguardian.com/business/blog/2014/feb/18/inflation-expected-to-fall-below-bank-of-englands-2-target
<ul><li><a href="http://www.theguardian.com/business/blog/2014/feb/18/inflation-expected-to-fall-below-bank-of-englands-2-target#block-530328f8e4b0911693db6ac5">UK consumer prices index falls to four-yr low</a></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/18/inflation-expected-to-fall-below-bank-of-englands-2-target#block-530336e4e4b0911693db6ae2">Pressure off BoE’s Carney to raise rates</a></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/18/inflation-expected-to-fall-below-bank-of-englands-2-target#block-53036108e4b0911693db6b24">Renzi starts talks to form a government</a><br></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/18/inflation-expected-to-fall-below-bank-of-englands-2-target?commentpage=2#block-53037713e4b0911693db6b44">US housebuilder confidence tumbles</a></li></ul><p class="block-time published-time"> <time datetime="2014-02-18T17:10:52.377Z">5.10pm <span class="timezone">GMT</span></time> </p><p>European markets have closed for the evening and the FTSE 100 has moved sharply higher after fairly benign inflation figures eased lingering concerns about rate rises in the immediate future. Elsewhere shares struggled to make much headway - not helped by a German confidence reading below target - while in the US, Wall Street made an indifferent start after the Presidents’ Day holiday after poor homebuilder confidence figures and disappointing Coca-Cola results. In all, the scores on the doors read:</p><p><b>• The FTSE 100 finished 60.43 points or 0.9% higher at 6796.43</b></p><p class="block-time published-time"> <time datetime="2014-02-18T16:34:44.265Z">4.34pm <span class="timezone">GMT</span></time> </p><p>Interesting chart of consumer price inflation across the globe:</p><p>Now all G7 headline CPIs below 2%, and Japan has the second highest! <a href="http://t.co/PN1HQdtIDq">pic.twitter.com/PN1HQdtIDq</a></p><p class="block-time published-time"> <time datetime="2014-02-18T16:26:23.874Z">4.26pm <span class="timezone">GMT</span></time> </p><p><b>Over to Greece where government officials are confirming that officials representing the debt-stricken country’s troika of creditors will return to Athens next week.</b> Helena Smith reports:</p><p>Mission heads representing the EU, ECB and IMF will return to Athens next Monday with, it is hoped, a view to completing their much-delayed review of the Greek economy after months of querulous debate over reforms. </p><p>“The troika will be back on the 24th and we have no idea how long they are set to stay,” said one finance ministry source. ‘But the hope is that enough consensus will be reached to release the outstanding installment we are owed.” International creditors have put two lots of rescue funds – worth€ 10.1bn and dating back to November – on hold over the country’s reluctance to implement dozens of reforms aimed at improving competitiveness in the Greek marketplace.</p><p class="block-time published-time"> <time datetime="2014-02-18T15:56:52.352Z">3.56pm <span class="timezone">GMT</span></time> </p><p><b>Back to the Anglo Irish trial (see <a href="http://www.theguardian.com/business/blog/2014/feb/18/inflation-expected-to-fall-below-bank-of-englands-2-target?commentpage=2#block-53036ab0e4b0911693db6b2e">earlier</a>), and news that one witness has been given immunity from prosecution.</b> Henry McDonald, our Ireland Correspondent, writes:</p><p>Anglo Irish Bank’s former Chief Financial Officer Matt Moran is giving evidence this afternoon in the trial of Sean FitzPatrick, 65, from Greystones in Co Wicklow, 51-year-old Patrick Whelan of Malahide in Dublin and 63-year-old William McAteer of Rathgar in Dublin.</p><p>The trio are charged with providing illegal financial assistance to 16 individuals and all three have pleaded not guilty to the charges.</p><p class="block-time published-time"> <time datetime="2014-02-18T15:32:29.795Z">3.32pm <span class="timezone">GMT</span></time> </p><p>Here’s more detail of the US housebuilding survey:</p><p>Home builder confidence index posts big drop, plunges to lowest level since last May <a href="http://t.co/a2bQhXJagt">http://t.co/a2bQhXJagt</a> <a href="http://t.co/8e4zAWjRfY">pic.twitter.com/8e4zAWjRfY</a></p><p class="block-time published-time"> <time datetime="2014-02-18T15:18:40.429Z">3.18pm <span class="timezone">GMT</span></time> </p><p><b>Over in the US there have been some disappointing New York manufacturing figures earlier, and now a downbeat housing survey.</b></p><p>US homebuilder confidence suffered its biggest ever drop in February, hit by the severe winter weather and worries about labour and building costs.</p><p>Significant weather conditions across most of the country led to a decline in buyer traffic last month. Builders also have additional concerns about meeting ongoing and future demand due to a shortage of lots.</p><p>The outcome is much weaker than expectations for a stable outcome at 56. Adverse weather conditions explain most of the decline as construction activity has been badly hit by extremely cold weather.</p><p>Comments included in today’s NAHB report suggest that further weakness cannot be rule out in the coming months.</p><p class="block-time published-time"> <time datetime="2014-02-18T15:03:10.024Z">3.03pm <span class="timezone">GMT</span></time> </p><p>Spain’s economy will continue its crawl out of recession, with the <b>Bank of Spain forecasting growth of 1% for 2013</b>.<br /></p><p>The forecast, made today by Bank of Spain Governor Luis Maria Linde, compares to an official projection of 0.7%. Other <a href="http://www.bde.es/bde/en/secciones/prensa/Agenda/Datos_de_credit_28cabda3638d341.html">Bank of Spain data showed a jump in the number of bad loans</a>, as consumers and companies struggle to make repayments.</p><p>The most likely recovery in the next few months will be through relatively moderate activity growth. Internal demand will continue to gain weight, though within a very gradual recovery. </p><p>“We want to see a more efficient culture,” said Ignacio Buqueras, the most outspoken advocate of changing the Spanish schedule. “Spain has to break the bad habits it has accumulated over the past 40 or 50 years.”</p><p>For the moment, Spain’s government is treating the campaign seriously. In September, a parliamentary commission recommended that the government turn back the clocks an hour and introduce a regular eight-hour workday. As yet, the government has not taken any action.</p><p class="block-time published-time"> <time datetime="2014-02-18T14:24:29.265Z">2.24pm <span class="timezone">GMT</span></time> </p><p>The <b>trial of <a href="http://www.theguardian.com/business/2014/feb/03/anglo-irish-bank-trial-profiles">three senior executives</a> who almost bankrupted Ireland</b> is now in its third week. One of the star witnesses has been Ireland’s one-time richest man, Sean Quinn, who borrowed billions from the bank to fund a global property portfolio during the Celtic Tiger boom years. When property prices collapsed across the world, Quinn owed billions and had to file for bankruptcy.</p><p><b>Henry McDonald</b>, the <b>Guardian’s Ireland correspondent</b>, has been following the latest from the courtroom.</p><p>Executives at the bank that almost bankrupted Ireland realised by the autumn of 2007 that ex-billionaire Sean Quinn’s stake in the Anglo Irish Bank had become “potentially catastrophic,” a Dublin court heard today.</p><p>The former head of UK operations for the now defunct Anglo Irish Bank revealed that by September 2007 Quinn had taken out loans worth around €900 million to hold onto a 24% control of shares.<br /></p><p class="block-time published-time"> <time datetime="2014-02-18T14:04:27.766Z">2.04pm <span class="timezone">GMT</span></time> </p><p><b>Ukrainian dollar bonds have fallen sharply</b>, as <a href="http://www.theguardian.com/world/2014/feb/18/ukraine-protesters-clash-police-reform">clashes between police and anti-government protesters escalated outside the country’s Parliament today</a>. </p><p>This seems to be the worst spate of violence thus far seen through this conflict.</p><p>Things seem to be getting out of control.﻿</p><p class="block-time published-time"> <time datetime="2014-02-18T13:43:02.584Z">1.43pm <span class="timezone">GMT</span></time> </p><p><b>Matteo Renzi, Italy’s prime minister designate, has embarked on discussions to form a cabinet, but</b><b> plenty of high profile candidates</b> have already ruled themselves out.</p><p>A <b>Reuters Rome correspondent</b> reports that talks have begun between the smaller parties in the current ruling coalition. But the more important talks are expected later in the evening between Renzi, who leads the Democratic Party, and Angelino Alfano, leader of the centre-right NCD party, whose support will be vital to getting a majority in parliament.</p><p>From Reuters</p><p>The economy ministry has attracted particular scrutiny and it remains unclear whether Renzi will appoint a politician with experience of running a large department or turn to another technocrat to succeed the outgoing minister, former Bank of Italy official Fabrizio Saccomanni.</p><p>Lucrezia Reichlin, a highly regarded professor at the London Business School who is in the running to become deputy governor of the Bank of England, has been widely tipped but has so far given no clear signal of her intentions.</p><p>There was embarrassment on Monday when a radio station made a prank call to Fabrizio Barca, a minister under former Prime Minister Mario Monti who had been seen as a potential candidate but who expressed frustration with the impulsive Renzi.</p><p>Matteo Renzi has earned his chance. He is intelligent and passionate about Italy's needs. New new Labour.</p><p>If Matteo Renzi's reform agenda succeeds, few Italian citizens will care how he got into office <a href="http://t.co/7U3Xacg9uh">http://t.co/7U3Xacg9uh</a></p><p class="block-time published-time"> <time datetime="2014-02-18T13:19:07.931Z">1.19pm <span class="timezone">GMT</span></time> </p><p>In Brussels, European finance ministers are wrapping up discussions on how to close down problem banks. The discussions are part of efforts to agree a single bank-resolution mechanism for the eurozone. A press conference - <a href="http://ec.europa.eu/avservices/ebs/schedule.cfm?page=2&amp;date=02/18/2014&amp;institution=0#s254435">streamed here</a> - is getting underway now.</p><p>Earlier today the Ecofin issued this <a href="http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ecofin/141056.pdf">statement on the EU’s economic performance</a> - a bit like a class of students writing their own end of term report.</p><p>WELCOMES the considerable progress made with fiscal consolidation and TAKES NOTE that EU and euro area aggregate debt levels are expected to peak in 2014 and to start decreasing in 2015. The aggregate planned fiscal effort in the EU is envisaged to decline in2014, compared to 1 % on average in 2011-2013.</p><p> ACKNOWLEDGES that, at the same time, public debt levels in most Member States remain high and continue to increase. Therefore STRESSES that it is crucial for all Member States to stay on course with the agreed growth friendly, differentiated fiscal consolidation strategy in order to ensure the sustainability of public finances, and EMPHASISES that Member States should continue to implement their fiscal policies in line with the Stability and Growth Pact, which allows the automatic stabilizers to work around the agreed path of structural adjustment, while ensuring the long term sustainability of public finances. These policies should be anchored in effective national governance frameworks to enhance confidence. </p><p class="block-time published-time"> <time datetime="2014-02-18T12:10:11.460Z">12.10pm <span class="timezone">GMT</span></time> </p><p><b>Gold has lost a lot of its glitter for investors</b>, leading to a slump in prices for the precious metal.</p><p> We estimate that unofficial imports almost doubled compared with 2012, to compensate for the decline in official imports.</p><p>2013 has been a strong year for gold demand across sectors and geographies, with the exception of western ETF [exchange-traded fund] markets. Specifically, it was the year of the consumer. Although demand has continued its shift from west to east, the growing demand for gold bars, coins and jewellery is a global phenomenon.</p><p class="block-time published-time"> <time datetime="2014-02-18T11:26:39.277Z">11.26am <span class="timezone">GMT</span></time> </p><p>Here is our inflation story:</p><p><b><a href="http://www.theguardian.com/business/2014/feb/18/uk-inflation-falls-below-bank-england-target">UK inflation falls below Bank of England’s 2% target</a></b></p><p class="block-time published-time"> <time datetime="2014-02-18T11:23:36.237Z">11.23am <span class="timezone">GMT</span></time> </p><p>The latest slew of ONS data underlines how London house prices are galloping ahead of the rest of the country.</p><p><b>UK house prices increased 5.5% in January</b>, although the London effect has skewed the headline figure. Interestingly, prices were least frothy in Scotland, as the country prepares for a referendum vote. </p><p>London house prices are rising at more than double the rate of any other UK region. But all regions now rising. (ONS) <a href="http://t.co/DSaikrlJEB">pic.twitter.com/DSaikrlJEB</a></p><p>Here is today's national disgrace. UK <a href="https://twitter.com/search?q=%23CPI&amp;src=hash">#CPI</a> is 1.9% and House Price Inflation is 5.5%. Put them together in CPIH and you get 1.8% Eh?!</p><p class="block-time published-time"> <time datetime="2014-02-18T11:10:45.790Z">11.10am <span class="timezone">GMT</span></time> </p><p><strong>The shadow Treasury minister </strong><strong>Cathy Jamieson </strong>has issued <b>Labour’s response</b> to the latest inflation data:</p><p>This small fall in the inflation rate is welcome, but with prices still rising much faster than wages the cost-of-living crisis continues. Under David Cameron working people are now on average &pound;1600 a year worse off.</p><p>Labour’s plan will tackle the cost-of-living crisis and earn our way to higher living standards for the many and not just a few.</p><p class="block-time published-time"> <time datetime="2014-02-18T11:06:19.839Z">11.06am <span class="timezone">GMT</span></time> </p><p>Stepping away from UK inflation, some unexpected news in Germany, where investor sentiment has dropped on concerns that the economic recovery in the US could loss steam, as well as currency turbulence in emerging markets.<br /></p><p>The highly-respected <b>ZEW economic think-tank’s <a href="http://www.zew.de/en/presse/2562">monthly poll of economic sentiment dropped to 55.7 from 61.7</a> </b>in<a href="http://www.zew.de/en/presse/2562"> </a>February falling well short economists’ expectations. It was the lowest reading since November. </p><p>Although the ZEW index has a good track record of predicting economic turning points, the latest decline does not point to a change in direction of the economic trajectory yet.</p><p>ZEW - nothing to see here. Mixed US data and EM stress were the drivers of this drop in expectations, which &quot;must not be overstated&quot;.</p><p class="block-time published-time"> <time datetime="2014-02-18T10:40:49.603Z">10.40am <span class="timezone">GMT</span></time> </p><p><b>Here is some more reaction to the inflation data.</b></p><p><b>Jeremy Cook, chief economist at World First, </b>thinks falling inflation will help close the gap between wages and prices.</p><p>Global inflation trends, particularly those in developed markets, have been falling in the past year and the UK is no exception. The combination of slowing consumer expenditure, discount operations by retailers, quiet energy markets and a strong pound have all helped CPI fall to its lowest level in 51 months.</p><p>While this one swallow does not make a summer, we would hope to see a trend of lower inflation over the course of 2014. This should allow for the gap between prices and wages to lessen.</p><p>We doubt that the Bank of England will raise interest rates until close to mid-2015, despite the markets increasingly expecting a move early next year. Furthermore, when interest rates eventually do start rising, the Bank of England has made it clear the increases will be gradual and limited...</p><p>We expect inflation to largely hover around 2.0% for an extended period. Given the amount of slack in the economy and consumers’ limited purchasing power, we doubt that underlying price pressures will pick up markedly despite the economy’s improved performance although some retailers and companies may try to boost their margins by lifting prices. <br /></p><p> An economic environment of low inflation and low interest rates allows people and firms to plan ahead, as they can be confident they will not encounter any unwelcome surprises. </p><p>The economy still faces many challenges, and every effort must be made to bolster the recovery. But since our current forecast suggests that inflation will remain at around the 2% target, it is now up to the Chancellor to use next month’s Budget to implement measures to boost enterprise and wealth creation.</p><p class="block-time published-time"> <time datetime="2014-02-18T10:32:52.824Z">10.32am <span class="timezone">GMT</span></time> </p><p><br />TUC general secretary <strong>Frances O’Grady</strong> reacts to the inflation data:</p><p>The latest fall in inflation is very welcome but only tells half the story of Britain’s living standards squeeze.</p><p>Hard-pressed working people need far stronger pay rises before they can really feel the benefit of falling inflation. As it stands, wages are still trailing behind the rising cost of living.</p><p class="block-time published-time"> <time datetime="2014-02-18T10:10:03.992Z">10.10am <span class="timezone">GMT</span></time> </p><p>So a good news for whisky drinkers and film buffs: as usual the ONS inflation data has a fascinating miscellany of details - <a href="http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/january-2014/stb---consumer-price-indices---january-2014.html#tab-Consumer-Prices-Index--CPI---What-are-the-main-movements-">full report here</a>.</p><p class="block-time published-time"> <time datetime="2014-02-18T10:09:42.470Z">10.09am <span class="timezone">GMT</span></time> </p><p>The <b>government </b>reacts to news that inflation has fallen to 1.9% - its lowest level in more than four years.</p><p>Today's fall in inflation is more evidence our <a href="https://twitter.com/search?q=%23LongTermEconomicPlan&amp;src=hash">#LongTermEconomicPlan</a> is working. We want to ensure a secure future <a href="https://twitter.com/search?q=%23ForHardworkingPeople&amp;src=hash">#ForHardworkingPeople</a>.</p><p>Inflation at lowest level in 4 years - sign that the government’s long term economic plan is working <a href="https://twitter.com/LibDems">@libdems</a> <a href="https://twitter.com/LibDemPress">@libdempress</a> <a href="https://twitter.com/search?q=%23strongereconomy&amp;src=hash">#strongereconomy</a></p><p class="block-time published-time"> <time datetime="2014-02-18T09:44:20.669Z">9.44am <span class="timezone">GMT</span></time> </p><p><b>A UK interest rate rise is not likely in the immediate future following the inflation figures</b>, said Annalisa Piazza of Newedge Strategy:</p><p>The outcome is bang in line with our expectations. Market consensus was for a stable reading at 2%.</p><p> On the other hand, the expected upswing in core inflation failed to materialize in Jan and core CPI continued its downward trend, dropping to 1.6% from 1.7% the prior month.</p><p class="block-time published-time"> <time datetime="2014-02-18T09:40:02.623Z">9.40am <span class="timezone">GMT</span></time> </p><p>Here are the Reuters snap headlines on the inflation figures:</p><p><b>18-Feb-2014 09:30 - UK JAN CPI -0.6 PCT MM, 1.9 PCT YY (FORECAST 2.0 PCT YY), LOWEST NOV 2009</b></p><p>Here's what contributed to the drop in CPI inflation down to 1.9% in Jan <a href="http://t.co/p4qcI5AwT2">pic.twitter.com/p4qcI5AwT2</a></p><p class="block-time published-time"> <time datetime="2014-02-18T09:34:29.914Z">9.34am <span class="timezone">GMT</span></time> </p><p>UK inflation falls to 1.9% in January compared to 2% in the previous month, below the Bank of England’s target.</p><p class="block-time published-time"> <time datetime="2014-02-18T09:01:14.047Z">9.01am <span class="timezone">GMT</span></time> </p><p>Are European carmakers on the road to recovery? The latest figures show that European car manufacturers pulled ahead last month, but are hardly motoring.</p><p>The <b>European Automobile Manufacturers Association</b> reports that new registrations rose by 5.5% in January, the fifth straight month the figures went up. However, the total of 935,640 vehicles was the second lowest since ACEA began this data series in 2003.</p><p> European new car sales bottomed out at the beginning of last year and today’s figures show that we’re on the road to recovery. The question is how much of that recovery is organic and how much is the result of actions taken by governments and carmakers.</p><p class="block-time published-time"> <time datetime="2014-02-18T08:30:48.171Z">8.30am <span class="timezone">GMT</span></time> </p><p><b>European markets look becalmed at the moment</b>, with investors playing safe ahead of data releases.</p><p>As well as the ONS statistics on UK inflation at 9.30, data on German economic sentiment is expected at 10 am GMT. </p><p class="block-time published-time"> <time datetime="2014-02-18T08:16:08.691Z">8.16am <span class="timezone">GMT</span></time> </p><p><b>Japan’s benchmark Nikkei index has chalked up its best day since August, closing up 3.13%, after a surprise move by the Bank of Japan to expand its lending</b>.</p><p>As widely expected, the BOJ maintained its pledge of increasing base money, its key monetary policy gauge, at an annual pace of 60-70 trillion yen ($589-$687 billion).</p><p> The central bank stuck to its assessment that Japan is recovering moderately, a sign it remains confident the world’s third-largest economy can weather the pain from a sales tax increase in April.</p><p>The theory that the yen’s depreciation will boost Japanese export volume is no longer true.</p><p class="block-time published-time"> <time datetime="2014-02-18T07:51:20.809Z">7.51am <span class="timezone">GMT</span></time> </p><p><b>Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and the business world.</b></p><p>Will the Bank of England go below its 2% target for inflation? That is the question as we await data that is expected to show that inflation slowed in January, thanks to discounts in shops and cheaper fuel costs.</p> <a href="http://www.theguardian.com/business/blog/2014/feb/18/inflation-expected-to-fall-below-bank-of-englands-2-target">Continue reading...</a>Bank of EnglandInflationEurozone crisisJapanTue, 18 Feb 2014 17:10:52 GMThttp://www.theguardian.com/business/blog/2014/feb/18/inflation-expected-to-fall-below-bank-of-englands-2-targetPhotograph: Thanassis Stavrakis/APA protest by school guards in Athens against government plans to sack thousands of civil servants as part of its austerity commitments to bailout creditors. Photo: AP Photo/Thanassis StavrakisPhotograph: Thanassis Stavrakis/APA protest by school guards in Athens against government plans to sack thousands of civil servants as part of its austerity commitments to bailout creditors. Photo: AP Photo/Thanassis StavrakisPhotograph: Richard Levine/ Richard Levine/Demotix/CorbisSnow storms in New York. Photo: Richard Levine/Demotix/CorbisPhotograph: Richard Levine/ Richard Levine/Demotix/CorbisSnow storms in New York. Photo: Richard Levine/Demotix/CorbisPhotograph: Efrem Lukatsky/APAnti-government protesters clash with riot police outside Ukraine's parliament in Kiev. Efrem Lukatsky/APPhotograph: Efrem Lukatsky/APAnti-government protesters clash with riot police outside Ukraine's parliament in Kiev. Efrem Lukatsky/APPhotograph: Mike Silva/flickrNot to be confused with gold. <a href="http://www.flickr.com/photos/sully-m/12045299076/">Mike Silva/flickr</a>Photograph: Mike Silva/flickrNot to be confused with gold. <a href="http://www.flickr.com/photos/sully-m/12045299076/">Mike Silva/flickr</a>Photograph: Office for National StatisticsInfluences on the consumer prices index/Office for National StatisticsPhotograph: Office for National StatisticsInfluences on the consumer prices index/Office for National StatisticsPhotograph: Calle Montes/PhotononstopThe upmarket Ginza district in Tokyo. Calle Montes/PhotononstopPhotograph: Calle Montes/PhotononstopThe upmarket Ginza district in Tokyo. Calle Montes/PhotononstopPhotograph: Yui Mok/PAThe Bank of England Yui Mok/PAPhotograph: Yui Mok/PAThe Bank of England Yui Mok/PAJennifer Rankin and Nick Fletcher2014-02-18T17:10:52ZThree ex-Barclays bankers charged in Libor-fixing case - livehttp://www.theguardian.com/business/blog/2014/feb/17/japans-economic-growth-disappoints-live
<ul><li><a href="http://www.theguardian.com/business/blog/2014/feb/17/japans-economic-growth-disappoints-live#block-5301f909e4b09e6e9779f95a">Serious Fraud Office accuses three ex-Barclays employees of fraud</a></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/17/japans-economic-growth-disappoints-live#block-5301ef69e4b0d376638b6e7b">Matteo Renzi to form Italy’s next government</a></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/17/japans-economic-growth-disappoints-live#block-5301c7f4e4b09e6e9779f90b">Inequality puts US on path to ‘Downton Abbey’ economy- Summers</a></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/17/japans-economic-growth-disappoints-live#block-53023afde4b0911693db69e7">Troika to return to Greece this week</a></li></ul><p class="block-time published-time"> <time datetime="2014-02-17T17:43:24.515Z">5.43pm <span class="timezone">GMT</span></time> </p><p>After a strong performance in Asia overnight following positive Chinese lending figures, UK shares ended a quiet day sharply higher. But other European markets fared less well, edging slightly lower. There was no guidance from Wall Street, closed for the President’s Day holiday. The closing scores were:</p><p><b>• The FTSE 100 finished up 72.38 points or 1.09% at 6736.00</b></p><p class="block-time published-time"> <time datetime="2014-02-17T17:28:03.635Z">5.28pm <span class="timezone">GMT</span></time> </p><p>In Greece, the eurogroup’s decision to put off negotiations on whether to extend a third financial package of the country and write off at least some of its debt is causing consternation. With the Troika poised to return as early as this week, Helena Smith reports:</p><p>With Greece’s political landscape becoming ever more tense ahead of euro elections in May, officials tonight are expressing consternation at the reluctance of creditor states to discuss what the country needs most: debt relief as soon as possible. One insider with close ties to the inner workings of prime minister Antonis Samaras’ two-party coalition, said: “we are constantly getting mixed messages. The feeling is, that partly as a result of tensions with [auditors representing] the troika, they are acting in bad faith.”</p><p>Putting an end to speculation that creditors at the EU, ECB and IMF would agree to some form of debt forgiveness before the European parliament poll, the Dutch finance minister Jeroen Dijsselbloem who heads the eurogroup of eurozone finance ministers, told reporters earlier today that any decision would be made “after the summer.” </p><p class="block-time published-time"> <time datetime="2014-02-17T17:06:37.846Z">5.06pm <span class="timezone">GMT</span></time> </p><p>And that appears to be that for the Eurogroup press conference.</p><p>What's pretty clear from <a href="https://twitter.com/search?q=%23Eurogroup&amp;src=hash">#Eurogroup</a> presser is that there's no agreement on timetable for deciding more bailout cash for <a href="https://twitter.com/search?q=%23Greece&amp;src=hash">#Greece</a></p><p class="block-time published-time"> <time datetime="2014-02-17T17:01:48.768Z">5.01pm <span class="timezone">GMT</span></time> </p><p>The Eurogroup moves on to Greece and Cyprus:</p><p><a href="https://twitter.com/search?q=%23Regling&amp;src=hash">#Regling</a>: All together <a href="https://twitter.com/search?q=%23Greece&amp;src=hash">#Greece</a> is still due to receive €10.1bn &amp; we stand ready to disburse</p><p>Dijsselbloem; I don't know how far the remaining €10.1bn in Greece will take us, need to wait for conclusion of current review</p><p><a href="https://twitter.com/search?q=%23Regling&amp;src=hash">#Regling</a>: after completion of prior actions <a href="https://twitter.com/search?q=%23ESM&amp;src=hash">#ESM</a> Board of Directors plans to consider disbursement of €150m on 2 April for <a href="https://twitter.com/search?q=%23Cyprus&amp;src=hash">#Cyprus</a></p><p>Rehn will hold a bilateral meeting with Italian Fin Min this evening to discuss developments in Italy and Europe</p><p><a href="https://twitter.com/search?q=%23Rehn&amp;src=hash">#Rehn</a> offers thanks to <a href="https://twitter.com/search?q=%23Italy&amp;src=hash">#Italy</a>'s Saccomani, quasi-confirming the worst-kept secret in Rome: he won't be back as finance minister.</p><p><a href="https://twitter.com/search?q=%23Rehn&amp;src=hash">#Rehn</a>: Confident Italy to stay committed to EU treaties, confident Italy gov't to boost competitiveness continue fiscal consolidation.</p><p>Rehn: we all know Italy has a very high level of public debt, piling new debt on top of this does not seem to improve econ competitiveness</p><p>Dijsselbloem: don't expect any conclusions or breakthroughs tonight on intergovernmental part of banking union, 1st round of discussion</p><p class="block-time published-time"> <time datetime="2014-02-17T16:48:17.244Z">4.48pm <span class="timezone">GMT</span></time> </p><p><b>International inspectors are to return to Greece in the coming days, Eurogroup president Jeroen Dijsselbloen has said</b>.</p><p>In a press conference currently underway (<b><a href="http://ec.europa.eu/avservices/ebs/live.cfm?page=2">live stream here</a></b>) following the Eurogroup meeting, he also said he was confident of getting an agreement from eurozone ministers in March on direct bank recapitalisation via the European Stability Mechanism.</p><p>Rehn expresses hope <a href="https://twitter.com/search?q=%23Greece&amp;src=hash">#Greece</a>'s <a href="https://twitter.com/search?q=%23Troika&amp;src=hash">#Troika</a> review could be finished by the end of March. <a href="https://twitter.com/search?q=%23fingerscrossed&amp;src=hash">#fingerscrossed</a></p><p>Rehn twice mentions the need for Greece to undertake structural reforms to allow for economic growth</p><p>*DIJSSELBLOEM SAYS CYPRUS FINANCIAL SECTOR IS STABILIZING, Program remains on track.</p><p>Eurogroup’s Dijsselbloem: Euro area economic activity picking up, has shown resilience amid EM rout^CT</p><p class="block-time published-time"> <time datetime="2014-02-17T15:47:47.677Z">3.47pm <span class="timezone">GMT</span></time> </p><p><b>Ratings agency Fitch said the change of power in Italy highlighted the volatility of the country’s politics</b>:</p><p>Uncertainty about the durability of governments and their capacity for structural reform and fiscal consolidation is one reason for the Negative Outlook on Italy’s ‘BBB+’ rating. </p><p>This is the latest episode of political volatility since last February’s inconclusive parliamentary elections (increased political uncertainty, combined with the depth of Italy’s recession, prompted our downgrade to ‘BBB+’ in March). Letta’s “grand coalition”, which took office in April, has already changed shape because of the split in the centre-right that created the New Centre Right (NCD) party. Despite the coalition’s legislative majority, policies like those in the draft 2014 budget reflected political bargaining and disputes between and within the major political parties. </p><p class="block-time published-time"> <time datetime="2014-02-17T15:21:39.557Z">3.21pm <span class="timezone">GMT</span></time> </p><p><b>Francois Hollande has been busy trying to woo foreign businesses to invest in France, offering them simpler and more stable tax policies.</b></p><p>The French president has been hosting 30 heads of the French operations of foreign companies at the Elysee Palace and pledged that taxes on an investment would not later rise, as had happened in the past. According to Reuters:</p><p>The socialist president, who last month announced France would phase out €30bn in charges on companies by 2017 to reverse its slide in trade competitiveness, also said French business taxes would be harmonised with those of its neighbours, especially Germany, by 2020.</p><p class="block-time published-time"> <time datetime="2014-02-17T14:57:39.943Z">2.57pm <span class="timezone">GMT</span></time> </p><p>The <b>global economy will continue to grow despite choppiness in emerging markets and worries about Chinese growth</b>.</p><p>That is the upbeat message from the Bundesbank, in its latest <a href="http://www.bundesbank.de/Redaktion/DE/Downloads/Veroeffentlichungen/Monatsberichte/2014/2014_02_monatsbericht.html">monthly report</a> (German).</p><p>Even if this should slow the economic growth of the countries concerned, their low global weight means it is not to be expected that the recovery of the world economy will be appreciably affected.</p><p>However, this should only fully show up in the GDP growth rates at the turn of the year, when the increased order inflow translates into production.</p><p class="block-time published-time"> <time datetime="2014-02-17T14:38:57.841Z">2.38pm <span class="timezone">GMT</span></time> </p><p>Libor update (see further <a href="http://www.theguardian.com/business/blog/2014/feb/17/japans-economic-growth-disappoints-live#block-5301fca8e4b0d376638b6e9e">12.14</a>):</p><p>The three ex-Barclays men charged with manipulating the Libor rate are due to appear in court on 26 February.</p><p class="block-time published-time"> <time datetime="2014-02-17T14:32:56.173Z">2.32pm <span class="timezone">GMT</span></time> </p><p>Sad news: <b>WH Smith has scrapped many of its honesty boxes because of customer “misuse”</b>, various newspapers report</p><p>Installed in some of WH Smith’s busiest locations, such as stations and airports, the boxes were intended to help time-poor commuters avoid the queues to buy a newspaper.</p><p>We got nearly three times as much money. Eyes give people the feeling they are being watched.</p><p class="block-time published-time"> <time datetime="2014-02-17T14:02:27.454Z">2.02pm <span class="timezone">GMT</span></time> </p><p>France and Germany will try to revive the European transactions tax, or Robin Hood tax, according to <a href="http://www.reuters.com/article/2014/02/17/eu-transactiontax-idUSL6N0LM1EV20140217">Reuters</a>.</p><p>The two countries, the power players of the European Union, will hold a joint cabinet meeting on Wednesday, where the plan is likely to be discussed.</p><p> I hope that we take a step forward on that. </p><p>We may possibly have to move ahead step by step.</p><p> We count on you to reject the special pleading of vested interests and to do what is right for our citizens and the sustainability of a robust financial sector.</p><p class="block-time published-time"> <time datetime="2014-02-17T13:51:15.785Z">1.51pm <span class="timezone">GMT</span></time> </p><p>Apologies for the error messages you may be finding when you click on links on the blog. We are trying to fix this problem.</p><p><i>Update: the problem is fixed, but please bear with us while all the bad ones are replaced.</i></p><p class="block-time published-time"> <time datetime="2014-02-17T13:34:32.103Z">1.34pm <span class="timezone">GMT</span></time> </p><p>A few more details on Ewald Nowotny’s speech that has been causing a stir.<br /></p><p>On the <b>ECB’s bond-buying programme</b>, known as Outright Monetary Transactions, he said it was less significant than it was:</p><p>[The programme] not that relevant anymore because we have a substantial improvement in the European situation and there are no expectations in the market of a break-up in the euro zone.</p><p>There might be good arguments to say let’s wait and see.</p><p>It’s good news that we see improvements in the real economy and how this connects to inflation rates is something that still needs to be discussed.</p><p>Interesting headlines there from Nowotny - pretty much suggesting that a rate cut is off the table for next month (barring a mega surprise)</p><p class="block-time published-time"> <time datetime="2014-02-17T12:28:03.576Z">12.28pm <span class="timezone">GMT</span></time> </p><p>So the euro-crisis is over? That appears to be the message from the European Central Bank governing council member Ewald Nowotny, who has said the<b> ECB’s bond buying programme is “not that relevant” any more</b> because of the improved economic situation.</p><p>This comes 18 months after ECB president Mario Draghi made that big promise to do “whatever it takes” to save the euro. Job done?</p><p><a href="https://twitter.com/search?q=%23ECB&amp;src=hash">#ECB</a>'s Nowotny: Redenomination Risk No Longer Exists. <a href="https://twitter.com/search?q=%23OMT&amp;src=hash">#OMT</a> No Longer Relevant, Has Achieved its Goal.</p><p>*ECB'S NOWOTNY SAYS EURO-AREA INFLATION MAY BE BELOW 2% IN 2016</p><p>ECB's Nowotny certainly couldn't be accused of being timid today....frankness and candor the order of the day</p><p class="block-time published-time"> <time datetime="2014-02-17T12:14:22.777Z">12.14pm <span class="timezone">GMT</span></time> </p><p>PA has more details on the SFO’s case against three ex-employees of Barclays for alleged manipulation of the Libor interest rate.</p><p>The men were named as Peter Charles Johnson, Jonathan James Mathew and Stylianos Contouglas. They are accused of conspiracy to defraud between June 1 2005 and August 31 2007 and will appear at London’s Westminster Magistrates’ Court on a date to be notified. </p><p>Barclays says it's a no comment on news that three former employees have been charged with conspiracy to defraud in <a href="https://twitter.com/search?q=%23Libor&amp;src=hash">#Libor</a> case. <a href="https://twitter.com/search?q=%23shocked&amp;src=hash">#shocked</a>.</p><p class="block-time published-time"> <time datetime="2014-02-17T11:59:38.623Z">11.59am <span class="timezone">GMT</span></time> </p><p>The Serious Fraud Office has started<b> criminal proceedings against three former employees of Barclays Bank for alleged manipulation of Libor interest rates.</b></p><p>In 2012 <a href="http://www.bbc.co.uk/news/business-18612279">Barclays was fined a record &pound;290m</a> for fixing Libor and admitted its actions “fell well short of standards”. Former chief executive Bob Diamond was even moved to give up his bonus.</p><p class="block-time published-time"> <time datetime="2014-02-17T11:55:29.506Z">11.55am <span class="timezone">GMT</span></time> </p><p>Just days after the <a href="http://www.independent.co.uk/news/uk/politics/uk-weather-uturn-may-see-david-cameron-reluctantly-tap-eu-flood-assistance-fund-9127137.html">British government decided to ask the European Union for financial aid to deal with the floods</a>, the UK is on the receiving end of more EU largesse.</p><p>Our friends at Fast FT report that<b> the European Investment Bank, the EU bank, will invest &pound;1bn a year in housing in the UK</b> to help tackle the affordability crisis.</p><p class="block-time published-time"> <time datetime="2014-02-17T11:27:20.216Z">11.27am <span class="timezone">GMT</span></time> </p><p>We know that Renzi met Italian president Giorgio Napolitano for 90 minutes.<br /></p><p class="block-time published-time"> <time datetime="2014-02-17T11:20:46.251Z">11.20am <span class="timezone">GMT</span></time> </p><p>No big reaction from markets so far: Italy’s FTSE MIB is flat at 20,436, having lost earlier gains.</p><p class="block-time published-time"> <time datetime="2014-02-17T11:19:00.784Z">11.19am <span class="timezone">GMT</span></time> </p><p>From the wires:</p><p class="block-time published-time"> <time datetime="2014-02-17T11:01:37.307Z">11.01am <span class="timezone">GMT</span></time> </p><p>It looks like it is official...</p><p><a href="https://twitter.com/search?q=%23Italy&amp;src=hash">#Italy</a> - Matteo Renzi has received mandate from President Napolitano to form a government.</p><p class="block-time published-time"> <time datetime="2014-02-17T10:52:57.976Z">10.52am <span class="timezone">GMT</span></time> </p><p>While we wait for Italy’s new prime minister to emerge from the presidential palace, check out this fun guide to <a href="http://albertonardelli.tumblr.com/post/76620506426/8-things-you-probably-didnt-know-about-matteo-renzi">8 things you probably didn’t know about Matteo Renzi</a>.</p><p class="block-time published-time"> <time datetime="2014-02-17T10:48:02.194Z">10.48am <span class="timezone">GMT</span></time> </p><p>The risk that the eurozone could be entering a period of deflation remains a clear and present danger, with <b>statistics showing that Greek consumer prices continued to fall in January</b>.</p><p><a href="http://www.statistics.gr/portal/page/portal/ESYE/PAGE-themes?p_param=A1701">Prices fell by 1.2% in January on the previous month according to El.Stat</a><a href="http://http://www.statistics.gr/portal/page/portal/ESYE/BUCKET/A0515/PressReleases/A0515_DKT87_DT_MM_01_2014_01_F_EN.pdf">,</a> although the pace of deflation slackened off. In November Greek deflation was its worst ever since records began in 1960 and prices have now dropped steadily for 11 months in a row.</p><p class="block-time published-time"> <time datetime="2014-02-17T10:28:48.199Z">10.28am <span class="timezone">GMT</span></time> </p><p><b>European energy consumption fell by 8% between 2006 and 2012</b>, according to<a href="http://http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/8-17022014-AP/EN/8-17022014-AP-EN.PDF"> data released this morning</a> by Eurostat.</p><p class="block-time published-time"> <time datetime="2014-02-17T10:07:24.378Z">10.07am <span class="timezone">GMT</span></time> </p><p>Love it when <a href="https://twitter.com/search?q=%23Greece&amp;src=hash">#Greece</a> graphs are off the pictures axes. This one from <a href="https://twitter.com/search?q=%23OECD&amp;src=hash">#OECD</a> on bad loans <a href="http://t.co/jLTTM09VhF">pic.twitter.com/jLTTM09VhF</a></p><p class="block-time published-time"> <time datetime="2014-02-17T10:04:12.414Z">10.04am <span class="timezone">GMT</span></time> </p><p>A mixed picture on European stock markets this morning, with the FTSE100 pulling ahead, while the pan-European FTSEurofirst 300 index is not far off the five-year high it hit in January.</p><p>Market watchers think <a href="http://http://www.reuters.com/article/2014/02/15/us-china-economy-money-idUSBREA1E0AL20140215">a surge in Chinese bank lending</a> is bolstering sentiment.</p><p class="block-time published-time"> <time datetime="2014-02-17T09:45:55.258Z">9.45am <span class="timezone">GMT</span></time> </p><p>No limo for him. Matteo Renzi arrives for his meeting with Italy’s president Giorgio Napolitano.</p><p>Renzi arrivato al Colle <a href="http://t.co/rec5SgQZDx">http://t.co/rec5SgQZDx</a> <a href="http://t.co/eBUOLHv6hY">pic.twitter.com/eBUOLHv6hY</a></p><p>The magnificent press room in Rome's Presidential Palace. Awaiting new PM <a href="https://twitter.com/search?q=%23Renzi&amp;src=hash">#Renzi</a>. <a href="http://t.co/0bgiajmPpa">pic.twitter.com/0bgiajmPpa</a></p><p class="block-time published-time"> <time datetime="2014-02-17T09:34:50.569Z">9.34am <span class="timezone">GMT</span></time> </p><p>Soon to get underway in Brussels: European economic policymakers and a smattering of politicians will debate “the eurozone area at a crossroads: policies for growth, jobs and competitiveness”.<br /></p><p>The agenda (local time)</p><p class="block-time published-time"> <time datetime="2014-02-17T09:14:28.778Z">9.14am <span class="timezone">GMT</span></time> </p><p>Some useful polling data from Ipsos Italia via Electionista:</p><p>The first poll on the Renzi-Letta change was released in <a href="https://twitter.com/search?q=%23Italy&amp;src=hash">#Italy</a> last night by <a href="https://twitter.com/IpsosItalia">@IpsosItalia</a>: <a href="http://t.co/yFBHC33Bs5">pic.twitter.com/yFBHC33Bs5</a></p><p class="block-time published-time"> <time datetime="2014-02-17T09:11:58.473Z">9.11am <span class="timezone">GMT</span></time> </p><p><b>Matteo Renzi </b>is likely to be named as Italy’s next prime minister in a matter of minutes. We are expecting the news at 9.30 GMT (10.30 local time), following his meeting with I<b>talian president Giorgio Napolitano</b>.<br /></p><p>Renzi has already had some good economic news. Italian bond yields have fallen close to an 8-yr low this morning following a decision to lift its credit outlook by the rating agency Moody’s.</p><p><a href="https://twitter.com/search?q=%23Italy&amp;src=hash">#Italy</a> bond yields down, Milan stock exch up. Markets show confidence in Renzi.</p><p class="block-time published-time"> <time datetime="2014-02-17T08:47:06.763Z">8.47am <span class="timezone">GMT</span></time> </p><p><b>Larry Summers</b>, the former US Treasury secretary and adviser to Barack Obama, has said inequality is putting the US on its way to becoming a Downton Abbey economy.<br /></p><p>Here is a flavour of his argument - made in an opinion piece in the <a href="http://www.washingtonpost.com/opinions/larry-summers-changing-the-tax-code-could-help-curb-inequality/2014/02/16/9e9c736e-9595-11e3-afce-3e7c922ef31e_story.html">Washington Post</a> and <a href="http://www.ft.com/cms/s/2/875155ce-8f25-11e3-be85-00144feab7de.html#axzz2tYqeFL7Q">Financial Times</a> (&pound;).</p><p>The share of income going to the top 1 per cent of earners has increased sharply. A rising share of output is going to profits. Real wages are stagnant. Family incomes have not risen as fast as productivity. The cumulative effect of all these developments is that the US may well be on the way to becoming a Downton Abbey economy. It is very likely that these issues will be with us long after the cyclical conditions have normalised and budget deficits have at last been addressed.</p><p>President Barack Obama is right to be concerned. Those who condemn him for “tearing down the wealthy” and engaging in un-American populism are, to put it politely, lacking in historical perspective. Presidents from Franklin Roosevelt to Harry Truman railed against the excesses of a privileged few in finance and business... All were reacting in their own way to a phenomenon that Bill Clinton has described best: “Although America’s rich got richer ... the country did not ... the stock market tripled but wages went down.”<br /></p><p class="block-time published-time"> <time datetime="2014-02-17T08:25:06.567Z">8.25am <span class="timezone">GMT</span></time> </p><p>There is a fair amount of reaction to the disappointing growth data from Japan. Most economists are expecting the economy to pick up in early 2014, but drop back following the introduction of a sales tax in April.<br /></p><p><br /><b>Takumi Tsunoda at Shinkin Central Bank Research Institute, Tokyo</b><br /></p><p>Growth will almost certainly accelerate in January-March because of last-minute buying ahead of the tax hike so the question is what happens in the following quarters and that’s where opinions among investors are divided.</p><p>We think consumption will be hurt after April. Optimists say the last time the sales tax was raised in 1997, consumption stumbled not because of the tax hike but because of a financial crisis.But at that time, wages were growing 1.5%. Today wages are up just 0.4%. So the negative impact on consumers’ real purchasing power will be bigger this time.</p><p>The pace of the economic recovery was not as strong as previously expected, as the pickup in exports is slow.But domestic demand remains strong and there will be a rush of demand before the sales tax goes up in April. So we will probably see growth in January-March data and the economy will likely continue to grow after the sales tax hike if demand from overseas grows.</p><p>I don`t think the Bank of Japan will adopt additional easing steps as domestic demand is strong and prices are steadily increasing, and as long as the markets are stable. The economy has not yet been derailed from its main scenario. The focus will be on how exports recover.</p><p>In terms of the breakdown of GDP, the story was, however, a little less miserable, with evidence of an increase in domestic demand, helping offset a limp export performance, and suggesting that at least the current fairly slow rates of growth should be sustainable, and not totally reliant on yen weakness.</p><p>But with the consumption tax hike in April, we really will need to see spending figures picking up more strongly, even if only representing front-loading, and failing a strong boost here, the arguments for the BoJ to provide a further dollop of yen weakness through some pre-emptive expansion of QE looks to be gathering strength. Recent comments from BoJ Governor, Kuroda, however, give no hint of this. </p><p class="block-time published-time"> <time datetime="2014-02-17T07:58:25.059Z">7.58am <span class="timezone">GMT</span></time> </p><p><b>Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and the business world.</b></p><p>And it is a disappointing start to the week in Japan, with data showing its economy grew well below expectations at the end of last year.</p> <a href="http://www.theguardian.com/business/blog/2014/feb/17/japans-economic-growth-disappoints-live">Continue reading...</a>Eurozone crisisJapanItalyShinzo AbeEuropean Central BankMon, 17 Feb 2014 17:43:50 GMThttp://www.theguardian.com/business/blog/2014/feb/17/japans-economic-growth-disappoints-livePhotograph: PHILIPPE WOJAZER/REUTERSFrench President Francois Hollande delivers his speech at the end of the "Strategic Council for Attractiveness" meeting at the Elysee Palace. Photo: Reuters/Philippe WojazerPhotograph: PHILIPPE WOJAZER/REUTERSFrench President Francois Hollande delivers his speech at the end of the "Strategic Council for Attractiveness" meeting at the Elysee Palace. Photo: Reuters/Philippe WojazerPhotograph: FILIPPO MONTEFORTE/AFP/Getty ImagesMatteo Renzi speaks to reporters at the Quirinale Palace in Rome, after being nominated Italy's youngest-ever prime minister. Filippo Monteforte/AFP/Getty ImagesPhotograph: FILIPPO MONTEFORTE/AFP/Getty ImagesMatteo Renzi speaks to reporters at the Quirinale Palace in Rome, after being nominated Italy's youngest-ever prime minister. Filippo Monteforte/AFP/Getty ImagesPhotograph: ANDREAS SOLARO/AFP/Getty ImagesMatteo Renzi drives to the presidential palace to be confirmed as prime minister. Andreas Solaro/afp/Getty ImagesPhotograph: ANDREAS SOLARO/AFP/Getty ImagesMatteo Renzi drives to the presidential palace to be confirmed as prime minister. Andreas Solaro/afp/Getty ImagesPhotograph: ANDREAS SOLARO/AFP/Getty ImagesMedia wait outside for the arrival of Matteo Renzi at the Quirinale palace on Monday. Andreas Solaro/AFP/Getty ImagesPhotograph: ANDREAS SOLARO/AFP/Getty ImagesMedia wait outside for the arrival of Matteo Renzi at the Quirinale palace on Monday. Andreas Solaro/AFP/Getty ImagesPhotograph: Nick Briggs/PRUS economy ‘like Downton Abbey’.<br> Photograph: Nick BriggsPhotograph: Nick Briggs/PRUS economy ‘like Downton Abbey’.<br> Photograph: Nick BriggsPhotograph: ANDY RAIN/EPABlack clouds over Barclays as three ex-employees are charged with manipulating interest rates. Andy Rain/EPAPhotograph: ANDY RAIN/EPABlack clouds over Barclays as three ex-employees are charged with manipulating interest rates. Andy Rain/EPAJennifer Rankin and Nick Fletcher2014-02-17T17:43:50ZGreece's borrowing costs drop on reports of debt relief plan - as it happenedhttp://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live
<p>Bloomberg: eurozone could cut Greek interest rates and extend bond maturities</p><ul><li><a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f20446e4b001cf7b2eebd3">UK service sector growth slows</a><br></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f25273e4b025fe0e2e6708">But US non-manufacturing surveys and jobs data in line</a></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f20d62e4b001cf7b2eebe4">No Christmas cheer as Euro retail sales dive in December</a><br></li><li><a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1ffcae4b001cf7b2eebc9">But eurozone private sector growth at 31-month high </a><br></li></ul><p class="block-time published-time"> <time datetime="2014-02-05T17:36:45.046Z">5.36pm <span class="timezone">GMT</span></time> </p><p>Over to Greece again where reaction to the news that<a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f22950e4b001cf7b2eec06"> EU partners are now considering extending bailout loan repayments</a> has been less than lukewarm. Helena Smith reports:</p><p>﻿It might be the best deal in the circumstances but in Greece the idea of prolonging debt pay backs has been met with derision. On both the left and right, politicians scoffed that international creditors, lead by the EU, were once again trying to buy time by kicking the can down the road. Even worse, they say, extending maturities will simply mean prolonged international supervision of a nation that now lies humiliated and shattered.</p><p>“It’s a ridiculous idea,” Dimitris Hadzisokratis, who handles economic policy for the small leftist Dimar party, told me. “Let’s not encumber future generations, 50 years down the line, with our mistakes.” Like many on the left, including the virulently anti-austerity main opposition Syriza party, now leading in the polls, Hadzisokratis also opposes the idea, signalled by Germany earlier this week, of Greece being given a third bailout package of around €20bn later this year.</p><p class="block-time published-time"> <time datetime="2014-02-05T17:32:20.971Z">5.32pm <span class="timezone">GMT</span></time> </p><p><b>A Federal Reserve member has said the central bank should wind down its bond buying programme more quickly than planned, with the economy seemingly on the mend.</b></p><p>Philadelphia Fed member Charles Plosser, a notable hawk, said the stimulus which has been supporting the markets should be ended by mid-year. The Fed has already trimmed its programme twice to $65bn a month, moves which have already caused chaos in emerging markets as investors withdraw from the high reward but high risk areas.</p><p>The longer we continue purchases in such an environment, the more likely we will fall behind the curve in reducing the extraordinary degree of monetary policy accommodation.</p><p>Fed's Plosser: Wants faster QE taper to reflect gains in US economy</p><p>Fed's Plosser: Forecasts economy growth around 3% this year, Expects unemployment to fall to 6.2% this year</p><p class="block-time published-time"> <time datetime="2014-02-05T17:07:06.330Z">5.07pm <span class="timezone">GMT</span></time> </p><p>Ahead of tomorrow's central bank meetings and Friday's US non-farm payroll numbers, European markets have mainly edged higher after days of decline. Germany is an exception, however, as its service sector data - while strong - showed <a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1fcafe4b001cf7b2eebc5">a slight slowdown in January compared to December</a>. The closing prices were:</p><p><b>• The FTSE 100 finished up 8.62 points or 0.13% at 6457.89</b></p><p class="block-time published-time"> <time datetime="2014-02-05T16:15:33.004Z">4.15pm <span class="timezone">GMT</span></time> </p><p>Here's a round-up from Markit of the manufacturing and services PMIs country by country:</p><p>Global All-Industry Output Index at 53.9 in January. Manufacturing and services output indices by country here: <a href="http://t.co/NwCS0I4OlF">pic.twitter.com/NwCS0I4OlF</a></p><p class="block-time published-time"> <time datetime="2014-02-05T15:33:01.163Z">3.33pm <span class="timezone">GMT</span></time> </p><p>Back with the Anglo Irish trial (<a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f227d7e4b025fe0e2e66d2">see earlier</a>) and some interesting details have emerged. Henry McDonald in Dublin writes:</p><p>﻿Anglo Irish bank executives were so desperate to get members of Ireland's one time richest family to borrow from the bank even as its share price tumbled in the summer of 2008 they followed the Quinn family to holidays.</p><p>Senior Counsel for Ireland's Director of Public Prosecutions told the trial of three senior Anglo Irish Bankers this afternoon that normally when holidaymakers saw their bank manager turning up on their holiday they would &quot;run for the sand dunes.&quot;</p><p class="block-time published-time"> <time datetime="2014-02-05T15:16:39.111Z">3.16pm <span class="timezone">GMT</span></time> </p><p><b>Europe's banks are expected to raise more capital after the latest stress tests, according to Fitch. </b>The ratings agency said:</p><p>﻿The European Banking Authority has raised the capital hurdle for its European-wide bank stress test this year, but the robustness of the exercise will depend on final methodology and scenarios, and how regulators apply certain discretions.</p><p>We expect additional capital needs to emerge from the stress test, but these are impossible to quantify at this stage. Banks across northern Europe should be able to address capital needs from internal sources, while banks with shortfalls in the more stressed environments of southern Europe may need to turn to external markets and more meaningful deleveraging through asset sales.</p><p class="block-time published-time"> <time datetime="2014-02-05T15:05:27.472Z">3.05pm <span class="timezone">GMT</span></time> </p><p>After <a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f2445ce4b025fe0e2e66fb">a positive Markit service sector survey earlier </a>, the ISM data just released has beaten expectations.</p><p>The non-manufacturing PMI index came in at 54 in January, up from 53 the previous month and better than the forecast 53.7. The employment component was at its highest level since November 2010.</p><p>Services ISM goes UP to 54 from 53.0. weather hits manufactuiring not services.</p><p>Factories stop working during bad weather, but restrants, hospitality and not to mention health &amp; entertainmmt services arent as affected.</p><p>Cold weather =&gt; people busy buying heater</p><p class="block-time published-time"> <time datetime="2014-02-05T14:54:07.180Z">2.54pm <span class="timezone">GMT</span></time> </p><p><b>Tomorrow sees the latest pronouncements from both the Bank of England and the European Central Bank, with some expecting the latter to perhaps unveil a cut in interest rates.</b> RBC Europe is not one of them, expecting no change, but its chief European economist James Ashley said:</p><p>We forecast no change in policy rates from either the ECB or the Bank of England tomorrow. However, there are substantial risks around both events: there is considerable risk that ECB could cut tomorrow (rather than next month, as we expect) and/or take further liquidity measures; and the BoE’s MPC may put out a statement clarifying the new forward guidance framework.</p><p class="block-time published-time"> <time datetime="2014-02-05T14:21:48.128Z">2.21pm <span class="timezone">GMT</span></time> </p><p>CVS, the largest pharmacy chain in the US, plans to stop selling cigarettes and other tobacco products from 1 October, its parent company has said.</p><p>The company has 7,600 stores across the US, and CVS Caremark Larry J. Merlo said:</p><p>Ending the sale of cigarettes and tobacco products at CVS/Pharmacy is the right thing for us to do for our customers and our company to help people on their path to better health. Put simply, the sale of tobacco products is inconsistent with our purpose.</p><p class="block-time published-time"> <time datetime="2014-02-05T14:14:26.568Z">2.14pm <span class="timezone">GMT</span></time> </p><p>Moody's said, on the debt ceiling:</p><p>The resumption of the US federal government statutory debt limit on February 7 does not currently affect the US government's Aaa rating and stable outlook, says Moody's Investors Service in a new report. Moody's expects the debt ceiling to be raised. Even if Congress fails to raise the limit in time, the US Treasury will continue to have the means to pay the interest on its debt, according to the report entitled &quot;Debt Limit Unlikely to Affect US Creditworthiness or Aaa Rating&quot;.</p><p>Moody's believes the Treasury would give interest payments high priority in the unlikely event the debt ceiling is not raised.</p><p class="block-time published-time"> <time datetime="2014-02-05T14:12:18.197Z">2.12pm <span class="timezone">GMT</span></time> </p><p>Meanwhile Moody's has said that the US debt limit deadline - which is fast approaching - was not likely to affect the government's AAA rating.</p><p>*MOODY'S SEES U.S. DEBT CEILING TO BE RAISED</p><p class="block-time published-time"> <time datetime="2014-02-05T14:06:11.373Z">2.06pm <span class="timezone">GMT</span></time> </p><p><b>Growth in the US services sector reached a four month high in January, according to data firm Markit.</b></p><p>Its service sector purchasing managers index rose to 56.7 compared to 55.7 in December, with companies still taking on employees but at a slightly slower pace. The jobs component of the survey slipped to 54.1 from 55.2.</p><p class="block-time published-time"> <time datetime="2014-02-05T13:44:01.853Z">1.44pm <span class="timezone">GMT</span></time> </p><p><b>Ahead of the US non-farm payroll numbers on Friday, the private sector added 175,000 jobs in January,</b> according to payrolls processor ADP.</p><p>This compares to expectations of a figure of 180,000. Meanwhile December's increase was revised down from 238,000 to 227,000. The ADP numbers are watched for any clues they might give to the payroll data, albeit last month's initial 238,000 figure was well wide of the mark. James Knightley at ING said:</p><p>﻿The January reading of the ADP employment survey has come in close to consensus at 175,000. This number has historically been regarded as the single best indicator for the official Bureau of Labour Statistics’ non-farm payrolls figure and on the face of it offers encouragement for the January reading of this report, due Friday. However, last month there was a big miss (238,000 for ADP and 87,000 for private non-farm payrolls). It is possible the ADP number is overstating again given the potential for awful weather to impact on the BLS data.</p><p>Nonetheless, the consistent firmness of the ADP report and the fact that recruiters have already highlighted the damaging impact bad January weather had on hiring practices means that if we do get a soft number from payrolls it should be treated cautiously. Indeed, with a further payrolls report due to be published before the March 19 Federal Reserve Open Market Committee meeting the odds still favour the Federal Reserve continuing the tapering process.</p><p class="block-time published-time"> <time datetime="2014-02-05T13:39:08.238Z">1.39pm <span class="timezone">GMT</span></time> </p><p><b>Citigroup's global head of foreign exchange Anil Prasad is to leave the bank</b>, according to Reuters.</p><p>But a source tells Reuters the departure is &quot;unrelated to the on-going foreign exchange investigation.&quot;</p><p class="block-time published-time"> <time datetime="2014-02-05T13:31:25.955Z">1.31pm <span class="timezone">GMT</span></time> </p><p><b>The long-running row over pay, pensions and conditions at Royal Mail is over, with a resounding majority of workers accepting a real which will raise wages by 9% over three years</b>.</p><p><b><a href="http://www.cwu.org/news/archive/ground-breaking-deal-confirmed-by-cwu-with-royal-mail-on-pay-and-job-protection.html">The Communication Workers Union has announced</a></b> that 94% of staff voted in favour, after months of negotiations which overshadowed the company's stock market flotation. It lifts the threat of strike action.</p><p>﻿&quot;We have achieved extensive and unprecedented legally binding protections for employees that not only strengthen their job security but also shape the values and principles that the Royal Mail Group will operate under as a private organisation.&quot; </p><p>&quot;I am pleased that our people have voted in favour of the terms of the agreement. This is the first critical step to provide long term stability and certainty for Royal Mail, our employees and our customers. Now the hard work starts. Working together we will create a strong foundation for the continued success of our business.&quot;</p><p class="block-time published-time"> <time datetime="2014-02-05T12:59:25.370Z">12.59pm <span class="timezone">GMT</span></time> </p><p><b>Europe's stock markets are otherwise calm</b>. The FTSE 100 is up 17 points, or 0.2%, while the French, German and Italian markets are all broadly flat.</p><p class="block-time published-time"> <time datetime="2014-02-05T12:40:21.463Z">12.40pm <span class="timezone">GMT</span></time> </p><p>The Greek stock market is also rallying following Bloomberg's report that EU officials are considering extending Greece's loans and cutting the repayment rates. It's now up over 3%.</p><p><a href="https://twitter.com/search?q=%23Greece&amp;src=hash">#Greece</a> Athens stock exxchange +3.33%, banks +4.54%</p><p class="block-time published-time"> <time datetime="2014-02-05T12:27:38.976Z">12.27pm <span class="timezone">GMT</span></time> </p><p><b>Greece's borrowing costs have dropped sharply as traders react to a Bloomberg report that the eurozone is close to extending the maturity on its existing loans to 50 years, and cutting the interest rate on some previous aid.</b></p><p>The debt relief plan would provide the leeway to give Greece the third bailout it needs, without officially writing off any bonds.</p><p>The next handout to Greece may include extending the maturity on rescue loans to 50 years and cutting the interest rate on some previous aid by 50 basis points, according to two officials with knowledge of discussions being held by European officials.</p><p>The plan, which will be considered by policy makers by May or June, may also include a loan for a package worth between 13 billion euros ($17.6 billion) and 15 billion euros, another official said. Greece, which got 240 billion euros in two bailouts, has previously had its terms eased by the eurozone and International Monetary Fund amid a six-year recession.</p><p>Under the eased terms, all the bailout-loan repayments would be extended from about 30 years and rates would be cut by 50 basis points on funds from the 80 billion-euro Greek Loan Facility, which was created for Greece’s first bailout in 2010, said the officials, who requested anonymity because talks are still in preliminary stages.</p><p><a href="https://twitter.com/FGoria">@FGoria</a> <a href="https://twitter.com/Alea_">@Alea_</a> 50yrs enough for the IWBTYWBT (I Won't Be There, You Won't Be There) trade.</p><p>Bloomberg story on Greece brings nothing really new. Greek debt needs some short-term relief via refi and rollover of ANFAs.</p><p class="block-time published-time"> <time datetime="2014-02-05T12:03:45.327Z">12.03pm <span class="timezone">GMT</span></time> </p><p><b><a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f215dbe4b025fe0e2e66c1">One of the biggest trials in European financial criminal history</a></b> has begun at Dublin's Central Criminal Courts not with a bang but a whimper, reports <b>Henry McDonald</b>:</p><p>There was no sign of any the expected protests outside the new court buildings close to the city's Phoenix Park this morning as three senior executives with the now defunct Anglo Irish Bank arrived. </p><p>Sean Fitzpatrick, Patrick Whelan and William McAteer face charges of providing &quot;unlawful financial assistance&quot; to 16 people to buy shares in Anglo Irish Bank.</p><p class="block-time published-time"> <time datetime="2014-02-05T11:58:10.187Z">11.58am <span class="timezone">GMT</span></time> </p><p><b>Ukraine's currency, the hryvnia, has hit its lowest point in almost five years, as ongoing political protests alarm investors and increase the demand from citizens for US dollars.</b></p><p>&quot;Every day of confrontation and a lack of desire to find a compromise weakens our country economically.</p><p>Political instability is putting pressure on the currency market. There is tension despite a lack of economic reasons for this. There are no fundamental economic reasons for concern.&quot;</p><p>&quot;The National Bank of Ukraine seems to have finally abandoned its four-year hryvnia to dollar peg and will be moving further toward greater foreign-exchange flexibility,&quot; said Vladimir Osakovskiy and Vadim Khramov, analysts at Bank of America Merrill Lynch.</p><p>As a result, the bank is forecasting the dollar will rise to as high as 10 against the hryvnia by the end of 2014.</p><p>﻿&quot;Ukraine is walking a fine line between a much-needed devaluation of a uselessly strong currency, and having to manage this slide without triggering the population's nerves.&quot; </p><p><a href="https://twitter.com/SerenaRuffoni">@SerenaRuffoni</a> On Ukraine depreciation. Me &quot;it's questionable whether they can stop it if it starts to tumble&quot; <a href="http://t.co/5w46wImVqU">http://t.co/5w46wImVqU</a></p><p class="block-time published-time"> <time datetime="2014-02-05T11:28:26.702Z">11.28am <span class="timezone">GMT</span></time> </p><p>Our politics liveblogger, Andy Sparrow, has also been examining the IFS Green Budget, and reckons it's conclusions (<i><b>many more cuts ahead</b></i>) are bad news for all three major parties, as well as the public. <b><a href="http://www.theguardian.com/politics/blog/2014/feb/05/david-cameron-and-ed-miliband-at-pmqs-politics-live-blog#block-52f211d9e4b001cf7b2eebeb">Here's his summary</a></b>.</p><p class="block-time published-time"> <time datetime="2014-02-05T11:17:52.657Z">11.17am <span class="timezone">GMT</span></time> </p><p><b>In Britain, the Institute for Fiscal Studies has warned that the government isn't even half way through its austerity cutbacks.</b></p><p>Despite the economy now growing, the next five years will see further deep spending cuts, according to the IFS's latest 'Green Budget&quot;. Only 40% of the total cutbacks have been imposed so far, it said.</p><p>Even with &pound;12bn a year of additional spending cuts to social security spending, Osborne's plans would imply cuts of more than 30% in &quot;unprotected&quot; public service budgets since 2010, the independent thinktank said.</p><p>The chancellor has ringfenced health, education and international aid spending from cuts.</p><p class="block-time published-time"> <time datetime="2014-02-05T10:47:39.702Z">10.47am <span class="timezone">GMT</span></time> </p><p>Meanwhile in Greece, the man at the centre of a major scandal swirling around the country’s struggling banking system has been arrested in Athens.</p><p>Looking ashen-faced and visibly fatigued, Angelos Filippidis, the former chairman of Hellenic Postbank - now at the heart of a criminal investigation into dodgy loans that resulted in €500m of losses for the bank - was taken into custody at Athens’ police headquarters.</p><p>His arrest at the capital’s airport, as he got off an early morning Turkish Airways flight, ends more than three weeks of legal tussle between Greece and Turkey following a court order for his extradition. </p><p>Angelos Filippidis, ex-chairman of defunct state lender Hellenic Postbank, arrested at Athens airport on money laundering and fraud charges</p><p class="block-time published-time"> <time datetime="2014-02-05T10:43:08.736Z">10.43am <span class="timezone">GMT</span></time> </p><p>One of the biggest trials in European financial crime is beginning in Dublin, so over to <b>Henry McDonald</b> in Ireland for a preview:</p><p>Three men belonging to the bank that almost bankrupted Ireland stand trial in court 19 of the Central Criminal Court close to the river Liffey in the Irish capital.</p><p>The three former executives in the Anglo Irish Bank are each charged with providing unlawful financial assistance to 16 individuals to buy shares in the now defunct and nationalised bank.</p><p class="block-time published-time"> <time datetime="2014-02-05T10:17:22.814Z">10.17am <span class="timezone">GMT</span></time> </p><p><b>Back in the eurozone -- and the latest retail sales figures, just released, are a shocker.</b></p><p>Retail sales fell 1.6% in December, compared with November, showing that Christmas was a less than merry occasion for many households despite the region officially returning to growth last summer.</p><p>Euro zone retail sales plunge 1.6% in December, steepest fall since May 2011 and one of the worst months since launch of the euro.</p><p class="block-time published-time"> <time datetime="2014-02-05T10:06:10.640Z">10.06am <span class="timezone">GMT</span></time> </p><p>Economists remain confident that the UK service sector is on the right track, despite<a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f20446e4b001cf7b2eebd3"> today's PMI survey showing a slowdown in growth</a>.</p><p>The generally decent eurozone data (where<a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1ffcae4b001cf7b2eebc9"> growth hit a 31-month high</a>) bodes well for Britain in 2014, some say, although economic growth may not be as strong as in the final months of last year.</p><p>That the UK services PMI is down from its peak late last year is little surprise and no cause for worry. The services PMI slipped to 58.3 today, from 58.8 in December and a peak of 62.5 in October.</p><p> Combined with a manufacturing PMI way above past averages and an outright booming construction sector, today’s services reading signals continued strong growth. Monetary policy is getting traction, employment is booming, and the UK’s main trading partner is moving further into expansionary territory. </p><p>The releases of the UK manufacturing [on Monday] and services PMI may have been weaker than expected but they were not bad data. </p><p> According to this manufacturing series, the sector has continued to expand for ten consecutive months and the services sector for thirteen. The implication from this release and this week’s construction and services sectors PMI is that the UK economic recovery remains on track.</p><p>While services activity was still strong in January according to the purchasing managers, it was at a seven-month low and new business lost some momentum which reinforces our view that GDP growth is likely to ease back a little to a 0.6-0.7% range through 2014 compared with the 0.8% quarter-on-quarter peak rates seen in the second and third quarters of 2013. This is seen resulting in overall GDP growth of 2.7% in 2014.</p><p>Indeed, the overall tone of the January purchasing managers’ surveys reinforces our belief that economic activity has slowed slightly from the peak levels seen around the summer and autumn of last year but is still very decent.</p><p>“The UK services industry continues to expand at a strong rate, but today’s figure should leave people in no doubt that the pace of the UK recovery has definitely slowed since Q3 of last year.</p><p>“We expect to see a strong level of business-to-business service growth remain through the rest of the year. However, once again, I must express concern about ongoing weakness in consumer spending and the likelihood that existing pressure on wages exacerbating via inflation.&quot;</p><p>It is possible that the wettest January on record may have dented activity to some extent, while it is important to point out that businesses remain optimistic with the services expectations component rising to its highest level since March 2010.</p><p>This offers hope that investment spending will pick up through the year and that employment will continue to grow with the numbers remaining consistent with our view that the UK economy will grow by around 3% this year.</p><p class="block-time published-time"> <time datetime="2014-02-05T09:55:42.986Z">9.55am <span class="timezone">GMT</span></time> </p><p>Perhaps we shouldn't be surprised that Britain's service companies reported a drop in new business last month (<a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f20446e4b001cf7b2eebd3">see previous post</a>), given the surge in demand last year:</p><p class="block-time published-time"> <time datetime="2014-02-05T09:39:01.498Z">9.39am <span class="timezone">GMT</span></time> </p><p><b>However....growth in the UK's service sector has slowed last month, Markit reports.</b></p><p>UK Services PMI (January) = 58.3 vs 59.0 expected and 58.8 previous</p><p>The UK service sector remained on a strong growth footing at the start of 2014, with activity and new business both continuing to rise markedly albeit at the slowest rates since mid-2013. </p><p>Capacity came under renewed pressure, with backlogs rising at the sharpest rate since May 1997. Employment growth remained marked as a result, with recruitment in part bolstered by positive business expectations for activity. </p><p>“The surge in demand resulted in backlogs of work escalating at the sharpest rate in over 16 years. As a result, capacity is continually being tested and firms have sought to recruit skilled candidates, with employment levels rising for the thirteenth month in a row.&quot;</p><p class="block-time published-time"> <time datetime="2014-02-05T09:23:08.094Z">9.23am <span class="timezone">GMT</span></time> </p><p><b>It's official - the eurozone's private sector has posted its strongest growth in more than two and a half-years, despite the weakness in France </b>(<a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1fae0e4b025fe0e2e6693">see 8.55am</a>).</p><p>﻿Job creation in Germany and renewed employment growth in Spain was offset by further cuts in France and Italy, albeit at slower rates. Irish employment was flat over the month. </p><p>“We should expect GDP forecasts for 2014 to start being revised up if the PMI continues to rise, with the consensus of 1.0% growth already looking somewhat conservative.</p><p>“The upturn is also feeding though to the labour market: employment has stabilised over the past two months, bringing an end to the continual culling of staffing levels seen since the start of 2012. Hopefully we will now soon see companies start to generate new jobs in significant enough numbers to bring down the region’s unemployment rate in coming months, which will perhaps represent the true start of the economic recovery for many people.</p><p>Although the service sector has returned to growth, its weak pace of expansion reflects still-subdued domestic demand – especially from consumers – in many Eurozone countries, notably France and Italy. A revival in consumer sentiment in these countries will be an important ingredient of a more robust upturn.” </p><p class="block-time published-time"> <time datetime="2014-02-05T09:06:51.462Z">9.06am <span class="timezone">GMT</span></time> </p><p>Oliver Kolodseike, economist at Markit, said German factories are driving its recovery, with <a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1fcafe4b001cf7b2eebc5">today's data</a> showing a slight slowdown in service sector growth.</p><p></p><p>“Germany’s private sector retained its solid growth momentum at the start of 2014, with activity expanding at the quickest pace since June 2011. A closer look at the data, however, shows that the latest improvement was largely driven by manufacturers, whereas services output growth eased to a three-month low.</p><p>“New order growth in the service sector inched down to a near-stagnant pace in January, with anecdotal evidence suggesting that some clients hesitated to release their budgets on time. Nevertheless, companies felt confident about their business outlook, resulting in further job creation.” </p><p class="block-time published-time"> <time datetime="2014-02-05T09:01:07.464Z">9.01am <span class="timezone">GMT</span></time> </p><p>But while <a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1fae0e4b025fe0e2e6693">France stumbles</a>, Germany's private sector posted its strongest growth in two and a half-years.</p><p>Markit reports that the German service sector kept growing in January, with a healthy PMI reading of 53.1. That's a slightly slowdown compared with December, but still safely in expansion territory.</p><p>Markit Germany Composite Output Index climbs to 31-month high of 55.5, as mfg output rises sharply <a href="http://t.co/UJMYEo6nvt">pic.twitter.com/UJMYEo6nvt</a></p><p class="block-time published-time"> <time datetime="2014-02-05T08:55:57.855Z">8.55am <span class="timezone">GMT</span></time> </p><p><b>France's service sector kept shrinking in January, as Europe's second largest economy continued to lag behind the likes of <a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1f71ae4b001cf7b2eebbc">Spain</a> and <a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1f9e8e4b001cf7b2eebc2">Italy</a>.</b></p><p>It's service PMI came in at 48.9, showing another contraction -- although less severe than in December (when the PMI=47.8).</p><p>“Although the French service sector remained in decline at the start of 2014, the rate of contraction eased as both activity and new business fell to a lesser extent than in December. In the details, there was little to be particularly encouraged about as job shedding quickened while the divergence in input and output prices widened, implying pressure on company profit margins. </p><p>All in all, there was little sign of the sector shaking off its torpor, as highlighted by firms’ confidence remaining at a historically low level.&quot;</p><p class="block-time published-time"> <time datetime="2014-02-05T08:48:19.355Z">8.48am <span class="timezone">GMT</span></time> </p><p><b>Italy's service sector has moved closer to growth, with its PMI rising to 49.4 from 47.9 in December</b>.</p><p>That's tantalising close to the break-even 50-point mark.</p><p class="block-time published-time"> <time datetime="2014-02-05T08:38:04.101Z">8.38am <span class="timezone">GMT</span></time> </p><p><b>Finally, Spain's service sector firms have begun hiring more staff, ending a long run of job cuts stretching back to March 2008.</b></p><p>That's the key good news in today's service sector PMI data, which also showed another welcome rise in activity and new orders.</p><p>“The Spanish service sector backed up the solid performance seen in December with accelerated growth of activity in January, while we even saw an end to job shedding in the sector for the first time since the economic crisis began. </p><p>Companies are still having to offer discounts in order to secure sales, but they are increasingly optimistic that 2014 can see a recovery get properly underway.” </p><p class="block-time published-time"> <time datetime="2014-02-05T08:31:14.259Z">8.31am <span class="timezone">GMT</span></time> </p><p>In London, the FTSE 100 has risen 18 points in early trading -- following <a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live#block-52f1e562e4b025fe0e2e666e">the mini rally in Asia overnight</a>.</p><p><b>It's being led by RSA,</b> as traders welcome the appointment of Stephen Hester (formerly the boss of RBS) as the new CEO. </p><p>Biggest climber on the <a href="https://twitter.com/search?q=%23FTSE&amp;src=hash">#FTSE</a> is <a href="https://twitter.com/search?q=%24RSA&amp;src=ctag">$RSA</a> instant reaction to the Stephen Hester appointment. <a href="http://t.co/YlcLoRIlHB">pic.twitter.com/YlcLoRIlHB</a></p><p class="block-time published-time"> <time datetime="2014-02-05T08:25:12.437Z">8.25am <span class="timezone">GMT</span></time> </p><p>Growth in South Africa's service sector slowed again in January, according to today's report from Markit.</p><p>South Africa's services PMI fell to 50.3 in January, down from 50.5 in December, and close to that 50-point mark showing stagnation.</p><p class="block-time published-time"> <time datetime="2014-02-05T08:15:48.648Z">8.15am <span class="timezone">GMT</span></time> </p><p><b>The first eurozone service sector data is in, from Ireland, and it looks good</b>.</p><p>The Irish service sector reported strong growth in January, with its PMI (the measure of activity calculated by Markit) coming in at 61.5. That's shows slightly slower growth than December, when it hit 61.8, but still decent (any reading over 50 shows growth).</p><p>Investec Serv <a href="https://twitter.com/search?q=%23PMI&amp;src=hash">#PMI</a> Ireland: further sharp rise in activity as export growth hits record high <a href="http://t.co/LrDvePboYV">http://t.co/LrDvePboYV</a> <a href="http://t.co/h94f9MJuk8">pic.twitter.com/h94f9MJuk8</a></p><p>“Last month we said that the sector had exited 2013 with a strong tailwind behind it. </p><p>With order books and payrolls on the rise and the Expectations component standing at its joint-highest level since October 2006, it is clear that the outlook for the services sector in Ireland remains very encouraging indeed.” </p><p class="block-time published-time"> <time datetime="2014-02-05T08:08:51.723Z">8.08am <span class="timezone">GMT</span></time> </p><p><b>A remarkable story in the Financial Times this morning -- Italy has accused Standard &amp; Poor's of failing to appreciate its artistic and aesthetic</b><b> wonders when it downgraded its debt.</b></p><p>If financial analysts had spent more time admiring a Michaelangelo fresco or reading Dante instead of poring over spreadsheets, they might not have touched off the inferno that engulfed the Italian sovereign debt market, Italy’s state auditor is claiming. </p><p>Standard &amp; Poor’s revealed on Tuesday it had been notified by Corte dei Conti that credit rating agencies may have acted illegally and opened themselves up to damages of €234bn, in part by failing to consider Italy’s rich cultural history when downgrading the country. </p><p>As the Italian court of auditors report on ratings inadvertently demonstrates - Italy's best days are in the past, not in the future ..</p><p class="block-time published-time"> <time datetime="2014-02-05T07:55:38.206Z">7.55am <span class="timezone">GMT</span></time> </p><p>RANsquawk reckons trading desks will be cautious today, ahead of the Bank of England and the European Central Bank's monthly meetings tomorrow, and US jobs data on Friday:</p><p>Nikkei breathes a sigh of relief and claws back 1.2% ON, markets muted at the open as traders hold their breath ahead of <a href="https://twitter.com/search?q=%23ECB&amp;src=hash">#ECB</a>, <a href="https://twitter.com/search?q=%23BoE&amp;src=hash">#BoE</a> and <a href="https://twitter.com/search?q=%23NFP&amp;src=hash">#NFP</a></p><p class="block-time published-time"> <time datetime="2014-02-05T07:52:52.076Z">7.52am <span class="timezone">GMT</span></time> </p><p><b>Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.</b></p><p>35 minutes to go and the FTSE100 looks set to open down 20, at 6429.</p> <a href="http://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-live">Continue reading...</a>Eurozone crisisBusinessServices sectorEconomic growth (GDP)JapanEurozoneWed, 05 Feb 2014 17:36:56 GMThttp://www.theguardian.com/business/blog/2014/feb/05/asian-markets-europe-services-emerging-markets-business-livePhotograph: Menelaos Myrillas/APPhotograph: Menelaos Myrillas/APPhotograph: Menelaos Myrillas/APPhotograph: Menelaos Myrillas/APPhotograph: ANDY RAIN/EPAPhotograph: ANDY RAIN/EPAPhotograph: ANDY RAIN/EPAPhotograph: ANDY RAIN/EPAGraeme Wearden and Nick Fletcher2014-02-05T17:36:56ZGreek factories report first growth since August 2009 but US data sends markets lower - as it happenedhttp://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live
<p>• <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef5dfae4b0e2b516f9e9a4">Greece's manufacturing output finally rises in January</a><br></p><p>• <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52efaedce4b0ec81842b7538">US manufacturing survey show slump in new orders</a><br></p><p>• <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef5ffee4b0e2b516f9e9a8">Eurozone recovery picks up; France lags behind</a><br></p><p>• <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef3fe6e4b0e2b516f9e98d">Japan's Nikkei in correction territory after 10% fall </a></p><p class="block-time published-time"> <time datetime="2014-02-03T17:04:37.120Z">5.04pm <span class="timezone">GMT</span></time> </p><p>A late slump has sent European markets sharply lower. Earlier mixed manufacturing reports for January, with China disappointing but the eurozone generally positive, made investors slightly cautious. But <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52efaedce4b0ec81842b7538">the poor US ISM survey</a>, especially the forward looking new orders index which dropped sharply, sent Wall Street lower, which in turn dragged down other markets with it. The final tally showed:</p><p><b>• The FTSE 100 fell 0.69% or 44.78 points to 6465.66</b></p><p class="block-time published-time"> <time datetime="2014-02-03T16:21:44.518Z">4.21pm <span class="timezone">GMT</span></time> </p><p><b>Back with Greece, and reaction to the prospect of a third bailout has been big news in the country where the media is also making much of the opposition in Germany.</b> Helena Smith reports. </p><p>While there has been no official reaction to the news, well-placed insiders at the finance ministry are certainly not denying that a third rescue package for debt-ridden Greece is in the making. Indeed, the talk of the town today is that the aid package will be concluded by April – one month before crucial European elections in May and two before the country’s current programme ends in June. But the big challenge for Athens is that the accord comes without the tough conditions attached to the loan agreements twice bailed-out Greece has signed since May 2010. This has increased the pressure on prime minister Antonis Samaras’ shaky coalition government to not only wrap up stalled negotiations with Greece’s “troika” of creditors at the EU, ECB and IMF speedily but to do so convincingly with figures “that will impress.”</p><p>With this in mind the Greek finance minister Yannis Stournaras recently told reporters that “we are expecting some very positive data which will strengthen our armoury” adding that the prospect of such a “surprise” explained why Athens was in no rush to complete talks that have been stalled since September. Officials hinted that in addition to Greece’s primary budget surplus topping an unexpected €1bn, they will soon have other figures that will prove that the country is on the road to growth and economic recovery. “We’ll soon be in a position to arrive at an agreement under our own terms,” one official was quoted as telling Ta Nea.</p><p class="block-time published-time"> <time datetime="2014-02-03T15:42:44.087Z">3.42pm <span class="timezone">GMT</span></time> </p><p>Here's Rob Carnell at ING on the manufacturing ISM report:</p><p>﻿January’s Manufacturing ISM is absolutely awful, which given that the US generally is performing quite well, makes us think that this must be an aberration – maybe a spillover from the Polar vortex (shipments were anecdotally hit very hard), or a response to sharp energy price spikes over that period (gas and heating oil rose very sharply at times).</p><p class="block-time published-time"> <time datetime="2014-02-03T15:19:46.741Z">3.19pm <span class="timezone">GMT</span></time> </p><p>More on the disappointing ISM report from the US. Annalisa Piazza at Newedge Strategy said:</p><p>﻿We wouldn't read too much out of today's ISM. Business confidence might have also been affected by adverse weather conditions in Jan and a partial correction might be expected anytime soon. The Fed decided to continue its tapering cycle last week without seeing increasing downside risks for activity near term. The slow moderate trend in activity should continue going forward, supported by decent domestic demand and some improvement also in exports.</p><p>*ISM'S HOLCOMB SAYS WEATHER DOESN'T ACCOUNT FOR ENTIRE SLOWDOWN</p><p>ISM’s Holcomb: Severe weather did impact New Orders, but weather doesn’t account for the entire slowdown^CT</p><p>*ISM'S HOLCOMB SAYS JANUARY REPORT `A BLIP ON THE SCREEN'</p><p>Just want to point out that ISM, alongside Philly Fed and Chicago PMI are considered better indicators of US GDP than NFP, acc to Goldman</p><p class="block-time published-time"> <time datetime="2014-02-03T15:07:22.867Z">3.07pm <span class="timezone">GMT</span></time> </p><p>After the earlier news that <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52efa0d1e4b0ec81842b7526">the US manufacturing PMI came in at a three month low</a>, the rival ISM report is also downbeat.</p><p>The ISM's manufacturing PMI index came in at 51.3 in January compared to the forecast 56 and the previous month's 56.5p.</p><p>That ISM will have a lot of analysts lopping 50% off their NFP call right now...</p><p>ISM goes back to 1948. this is the 5th largest m/m fall in new orders</p><p>Blame the weather - ISM miss.</p><p>ISM falls to 51.3; big drops in production &amp; orders. &quot;A number of comments from the panel cite adverse weather conditions&quot; ISM says</p><p>US10year yield 2.633%...started 2014 at 3%. Dow -91, FTSE100 -19</p><p>US Treasury yields fall to 2.633 pct, lowest since November 8, according to Reuters</p><p class="block-time published-time"> <time datetime="2014-02-03T14:57:08.075Z">2.57pm <span class="timezone">GMT</span></time> </p><p>The TUC's senior economist has been looking at past IMF forecasts for the UK, with an interesting conclusion:</p><p>Looking at old IMF UK forecasts - in general too optimistic when economy in trouble &amp; too pessimistic when growing. <a href="http://t.co/2tEFN5Flyw">pic.twitter.com/2tEFN5Flyw</a></p><p class="block-time published-time"> <time datetime="2014-02-03T14:27:38.687Z">2.27pm <span class="timezone">GMT</span></time> </p><p><b>The Brookings Institution has pulled off a coup </b>-- <b><a href="http://www.brookings.edu/blogs/up-front/posts/2014/02/03-welcoming-aboard-ben-bernanke-wessel">it just announced </a></b>that Ben Bernanke, who just stepped down as chairman of the US Federal Reserve last week, is joining as a Distinguished Fellow in Residence.<br /></p><p>As Brookings' <a href="http://www.brookings.edu/blogs/experts/wesseld">David Wessel</a> explains, Bernanke is just starting to unwind after eight years -- no more Fed meetings, or squinting blearily at the Asian markets the moment he wakes up*: </p><p>﻿He will, instead, have time to reflect on what just happened. “ I was kind of like if you're in a car wreck. You're mostly involved in trying to avoid going off the bridge. And then later on you say, ‘Oh, my God,’ ” he said here recently. </p><p>Wow, great hire by <a href="https://twitter.com/brookings">@brookings</a> <a href="http://t.co/Y2JzWmZNHk">http://t.co/Y2JzWmZNHk</a></p><p>Really? He isn’t sick of Washington? RT <a href="https://twitter.com/AnnieLowrey">@AnnieLowrey</a>: Ben Bernanke to Brookings.</p><p class="block-time published-time"> <time datetime="2014-02-03T14:15:04.888Z">2.15pm <span class="timezone">GMT</span></time> </p><p><b>More manufacturing data - this time from America, showing that activity growth in the US factory sector slowed in January.</b></p><p>Markit reported that the US manufacturing PMI came in at a three-month low of 53.7 last month, down from December's 55.0.</p><p>“Survey respondents reported the weakest growth of output and new orders for three months in January, but with many companies blaming exceptionally cold weather for production and supply chain disruptions, the underlying trend looks to have remained robust. </p><p>“The ongoing expansion suggests that the goods producing sector is on course to contribute to another quarter of solid economic growth in the first quarter, and is also helping sustain a decent rate of job creation. The survey is broadly consistent with 10,000 jobs being created per month in the manufacturing sector which, added to the signal from the flash services PMI, points to non-farm payroll growth in the region of 200,000 in January.</p><p class="block-time published-time"> <time datetime="2014-02-03T13:56:14.320Z">1.56pm <span class="timezone">GMT</span></time> </p><p>Just in - some nice photos from the Philippine Stocks Exchange this morning, where dragon dancers marked the Chinese Lunar New Year.</p><p class="block-time published-time"> <time datetime="2014-02-03T13:32:06.448Z">1.32pm <span class="timezone">GMT</span></time> </p><p><b>Recommended lunchtime reading:</b></p><p class="block-time published-time"> <time datetime="2014-02-03T13:24:47.970Z">1.24pm <span class="timezone">GMT</span></time> </p><p><b>Public anger in Greece remain high today, though. </b></p><p>A group of protesters gathered outside tax offices in Athens this morning to urge government ministers not to allow homes to be repossessed from families who can no longer meet their debts, or auctioned to pay their bills.</p><p class="block-time published-time"> <time datetime="2014-02-03T13:11:56.978Z">1.11pm <span class="timezone">GMT</span></time> </p><p>The news that Greek factories finally returned to growth last month, and talk of a third bailout, has also pushed shares higher in Athens. Bank stocks are leading the risers. up almost 5%.</p><p><a href="https://twitter.com/search?q=%23Greece&amp;src=hash">#Greece</a> Athens stock exchange +3.29%, banks +4.93%</p><p class="block-time published-time"> <time datetime="2014-02-03T13:10:01.710Z">1.10pm <span class="timezone">GMT</span></time> </p><p><b>Greek government bonds have strengthened in value today, following <a href="http://www.theguardian.com/world/2014/feb/02/germany-preparing-third-financial-rescue-greece">these reports</a> that a third bailout loan could be agreed by April.</b></p><p>This has pushed down the yield, or interest rate, on 10-year Greek debt to around 8.53%, from 8.71% on Friday night. </p><p class="block-time published-time"> <time datetime="2014-02-03T12:58:44.221Z">12.58pm <span class="timezone">GMT</span></time> </p><p>Earlier today the UK's City watchdog, the Financial Conduct Authority, published &quot;warning notices&quot; against two bankers related to the investigation into the rigging of the <a href="http://www.theguardian.com/business/libor">Libor</a> interbank lending rate.</p><p>Our Sean Farrell has taken a look, and reports:</p><p>The notices, handed out in November but announced on Monday, are the first made public by the regulator since it gained the authority in October. They also show that the FCA is pursuing alleged Libor offenders through civil action.</p><p class="block-time published-time"> <time datetime="2014-02-03T12:45:05.360Z">12.45pm <span class="timezone">GMT</span></time> </p><p>As expected RT <a href="https://twitter.com/LorcanRK">@LorcanRK</a>: Constancio - the treatment of sovereign bonds will be in the stress test, not in the AQR</p><p class="block-time published-time"> <time datetime="2014-02-03T12:33:27.436Z">12.33pm <span class="timezone">GMT</span></time> </p><p>On, and full details of the ECB's new bank tests are online here: </p><p>Sovereign exposures in the held-to-maturity portfolios (HTM) will be treated in the same way as other credit exposures in that portfolio, i.e. the impact of the scenarios on the loss and default parameters will be calculated and will result in larger provisions. </p><p>Meanwhile the same types of securities in the available-for-sale (AFS) and held-for-trading (HFT) portfolios will be marked-to-market, in line with the scenario employed. The effect of the gradual phasing-out of AFS prudential filters on sovereign exposures will be fully disclosed. </p><p class="block-time published-time"> <time datetime="2014-02-03T12:22:36.841Z">12.22pm <span class="timezone">GMT</span></time> </p><p>Over in Frankfurt, the European Central Bank is outlining more details of this year's asset-quality review.</p><p>ECB vide-president V&iacute;tor Const&acirc;ncio has pledged that the stress tests will be rigorous:</p><p>﻿We will uphold the reputation of the ECB ... we will not put it at risk. Everything will be disclosed.</p><p>We will conduct an exercise that is very demanding and very rigorous.</p><p class="block-time published-time"> <time datetime="2014-02-03T12:11:51.474Z">12.11pm <span class="timezone">GMT</span></time> </p><p>Has all this talk of emerging market problems left you struggling to remember which country is a fast-growing <b>MINT</b>, a reliable <b>BRIC</b> or a fractious member of the <b>Fragile Five</b>?</p><p>Well, panic not - here's a handy chart from the TUC's Duncan Weldon, showing the main players in the emerging markets.</p><p><a href="https://twitter.com/DuncanWeldon">@DuncanWeldon</a> FTFY <a href="http://t.co/3e671OEXG1">pic.twitter.com/3e671OEXG1</a></p><p><a href="https://twitter.com/DuncanWeldon">@DuncanWeldon</a> you'd almost think these were terms coined by a charlatan</p><p class="block-time published-time"> <time datetime="2014-02-03T12:05:52.816Z">12.05pm <span class="timezone">GMT</span></time> </p><p>This graph shows how the Indian stock market has taken a pummelling since investors started losing faith in emerging markets earlier this month, pushing the Sensex down to <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef82c6e4b0e2b516f9e9d4">a two and a half-month low today</a>.</p><p class="block-time published-time"> <time datetime="2014-02-03T11:55:50.813Z">11.55am <span class="timezone">GMT</span></time> </p><p><b>Emerging market jitters hit the Indian stock market today, sending shares falling to a two and a half-month low.</b></p><p>The Sensex index fell 1.5%, or 304.59 points, to 20209. Manufacturing and auto stocks led the fallers, on fears that growth in developing countries could stall as central bankers raise borrowing costs to stem capital outflows and tackle inflation.</p><p class="block-time published-time"> <time datetime="2014-02-03T11:41:25.023Z">11.41am <span class="timezone">GMT</span></time> </p><p>The Telegraph's Bruno Waterfield also reckons a third Greek bailout is on the way:</p><p>Eurozone paves way for third Greek bail-out <a href="http://t.co/5E7IN8ke5N">http://t.co/5E7IN8ke5N</a></p><p class="block-time published-time"> <time datetime="2014-02-03T11:33:27.536Z">11.33am <span class="timezone">GMT</span></time> </p><p>The German finance ministry has firmly denied reports that a third aid package for Greece could include a further debt haircut.</p><p><b>Reuters' Berlin bureau </b>has the details:</p><p>&quot;There is no new situation regarding Greece,&quot; said spokesman Marco Semmelmann. </p><p>Asked about the possibility of a debt writedown, he said: &quot;I can deny that categorically&quot;.</p><p class="block-time published-time"> <time datetime="2014-02-03T11:07:03.222Z">11.07am <span class="timezone">GMT</span></time> </p><p>Here's our full story on this morning's UK manufacturing data, by Katie Allen:</p><p class="block-time published-time"> <time datetime="2014-02-03T11:03:26.885Z">11.03am <span class="timezone">GMT</span></time> </p><p><b>Traders have been piling into the yen this morning, pushing Japan's currency up to a two-month high of &yen;101.76 to the US dollar.</b></p><p>That may cause further concern in Toyko -- where concern over the strengthening yen helped push the Nikkei into <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef3fe6e4b0e2b516f9e98d"><b>an official correction today</b></a>.</p><p class="block-time published-time"> <time datetime="2014-02-03T10:47:28.848Z">10.47am <span class="timezone">GMT</span></time> </p><p><b>Back in the City, and Lloyds Banking Group is dragging down the market with a 3% drop in its share price</b>.</p><p>Lloyd's decision to set aside another &pound;1.8bn to cover PPI compensation (<b><a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef4968e4b0e2b516f9e991">see 7.58am</a></b>) appears to have sunk hopes that it might resume dividend payments when it announces its 2013 results later this month. Today's unscheduled statement warns that it aims to restart payments to shareholders in the second half of 2014.</p><p class="block-time published-time"> <time datetime="2014-02-03T10:42:41.991Z">10.42am <span class="timezone">GMT</span></time> </p><p>Economists have been chewing through this morning's manufacturing data from the eurozone (<a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef5182e4b0ec81842b74c0"><b>from here</b></a>), and the UK (<b><a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef6291e4b0ec81842b74d7">here</a></b>) data, and reckon the factory sector made a decent start to 2014.</p><p>Here's some reaction: </p><p>UK manufacturing is expanding solidly and is likely to continue doing so as the Eurozone gradually recovers its poise and easily available credit helps dynamic firms to take advantage of sterling still well below its pre-crisis levels. </p><p>The rise in the new export orders balance was noteworthy.</p><p>UK manufacturers have begun the year in positive mood, maintaining the solid activity trends seen during the second half of last year. </p><p>With separate data showing a further improvement in manufacturing activity across the euro zone, this supports our forecast for UK manufacturing output to grow by 2.7% this year, the fastest rate of expansion in four years. Some doubts will persist, however, over the durability of this upturn given the ongoing weakness in investment spending and concerns over the impact of high energy costs across the sector.</p><p>Buoyed by positive global macroeconomic indicators and the relatively settled trading environment that has emerged, manufacturers have renewed confidence to invest in capacity, plant, product development and the exploration of new markets. </p><p>January’s positive domestic demand and export figures shows the momentum gained in the sector during 2013 is set to continue this year.</p><p>“Growth in UK export orders was the strongest since February 2011 and, thankfully, shows that British exports are being demanded across the world as opposed to just in Europe. </p><p>Jobs have moved higher too, with the pace of job creation close to a 2.5 year high.</p><p class="block-time published-time"> <time datetime="2014-02-03T09:59:31.232Z">9.59am <span class="timezone">GMT</span></time> </p><p><b>Howard Archer of IHS Global Insight </b>is cheered that all the eurozone's peripheral countries reported a rise in manufacturing activity in January (<a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef5ffee4b0e2b516f9e9a8">details here</a>)</p><p>Greece's long-awaited return to factory growth, and the pick-up in Spain and Italy, suggests the euro area's economy continues to recover, Archer said:</p><p>Spanish manufacturing activity rise at the fastest rate for 45 months (up to 52.2 from 50.8) while Italian manufacturing expansion (down to 53.1 from 53.3) almost matched the 32-month high achieved in January. </p><p>This fuels hopes that sustainable Spanish and Italian recovery really is now gradually developing. Furthermore, Greek manufacturing activity (up to 65-month high of 51.2 from 49.6) expanded in January for the first time since August 2009, suggesting that there is a real chance that Greek GDP could finally stop contracting overall in 2014.</p><p class="block-time published-time"> <time datetime="2014-02-03T09:50:36.810Z">9.50am <span class="timezone">GMT</span></time> </p><p><b>Britain's factory recovery continued in January with a faster rise in new orders, although the pace of increased slowed a little in January.</b></p><p>Whilst domestic demand continues to climb, it is the expansion overseas that promises continued growth. The illusive export market has long been heralded as the key to unlock UK economic growth and in manufacturing appears to be coming to fruition, with new business rates climbing fastest in nearly three years.</p><p>This has enabled firms large and small, across the sector, to invest in staff, marking the ninth successive month on month increase in employment. The rate of growth in jobs has also remained close to November’s two and a half year high. Whilst costs climbed yet again, firms were able to pass these on to customers, a further sign of bullishness across the sector.</p><p class="block-time published-time"> <time datetime="2014-02-03T09:33:58.789Z">9.33am <span class="timezone">GMT</span></time> </p><p><b>Europe's manufacturing sector continued to recovery in January, data firm Markit has reported, with the strongest rise in activity since May 2011.</b></p><p>Greek manufacturing grew in January for the first time since August 2009. Generally eurozone factories had strongest Jan since mid-2011.</p><p>“The survey data indicate that manufacturing output across the eurozone is growing at a quarterly rate in excess of 1%, led by Germany, where the rate of increase is perhaps as strong as 3%. Encouragingly, France is also showing signs of stabilising, enjoying a welcome return to export growth, though manufacturing in the eurozone’s second-largest member state remains in overall decline and a drag on the region.</p><p>“However, perhaps the most important development in the report is the further revival of manufacturing in the region’s periphery. Both Italy and Spain are seeing robust growth of output and order books, and the Greek PMI’s rise above 50 for the first time since August 2009 is an important signal of how even the most troubled member states are returning to growth. </p><p class="block-time published-time"> <time datetime="2014-02-03T09:21:45.427Z">9.21am <span class="timezone">GMT</span></time> </p><p><b>At long, long, last, Greece's factory activity has risen in a sign that the country's long slump may be easing.</b></p><p>But with job losses still up across the sector, any recovery hasn't yet reached the country's battered population.</p><p>“Solid and accelerated increases in both output and new orders lifted the PMI to its highest level in close to five-and-a-half years in January, and perhaps more importantly above the 50.0 mark that distinguishes growth from contraction. A slight rise in new export orders contributed to the improved performance, though data inferred that it was the domestic market that provided the principal boost.</p><p>“Deflationary pressures persist, with firms lowering their prices again amid ongoing efforts to grow sales. A knock-on effect of this was a further squeeze on profitability, which in turn encouraged the advancement of productivity and more job losses.” </p><p class="block-time published-time"> <time datetime="2014-02-03T09:14:30.369Z">9.14am <span class="timezone">GMT</span></time> </p><p><b>Another knock-out result for Germany -</b>- its factory output grown at its fastest rate in 32 months.</p><p>The German PMI surged to 56.5 in January, up from 54.3 in December, which is the strongest reading asince May 2011.</p><p>The sharp rise in new work was supported by stronger demand from both domestic and foreign markets, with Asian countries and the US mentioned as sources of export growth. </p><p>“It looks as if growth is now also translating into meaningful job creation, with companies hiring new workers for a second straight month. The increase in employment levels highlights greater confidence about upcoming workloads, which was also supported by the steepest rise in backlogs in over two-and-a-half years.</p><p class="block-time published-time"> <time datetime="2014-02-03T09:06:51.926Z">9.06am <span class="timezone">GMT</span></time> </p><p><b>France's factory activity fell again in January, but it may be close to the bottom.</b></p><p>The French manufacturing PMI rose to 49.3 in January, from a pretty unimpressive 47.0 in December. That still shows a contraction, but at a much slower pace.</p><p>More problems for <a href="https://twitter.com/search?q=%23France&amp;src=hash">#France</a> as its manufacturing <a href="https://twitter.com/search?q=%23PMI&amp;src=hash">#PMI</a> is at a stagnant 49.3 in January</p><p class="block-time published-time"> <time datetime="2014-02-03T09:01:07.037Z">9.01am <span class="timezone">GMT</span></time> </p><p><b>Now Italy -</b>- its manufacturing sector grew again in January, but a little slower than in December.</p><p>The Italian manufacturing PMI came in at 53.1, slightly below December's 53.3 - but still showing solid growth.</p><p class="block-time published-time"> <time datetime="2014-02-03T08:57:14.534Z">8.57am <span class="timezone">GMT</span></time> </p><p>Markit also had worrying news for Russia -- its manufacturing activity fell to its lowest level in 55 months in January.</p><p>“Manufacturers started the year on a minor note, the January HSBC Russia Manufacturing PMI survey found. Indeed, all key economic activity indicators point to a broad-based contraction. </p><p>Notably, manufacturing output decreased for the first time since July last year. In conjunction with the reported decline in new orders, ongoing cuts in staffing, faster suppliers’ delivery times and a stronger rise in output prices, the overall picture in manufacturing looks pretty gloomy. </p><p class="block-time published-time"> <time datetime="2014-02-03T08:48:13.835Z">8.48am <span class="timezone">GMT</span></time> </p><p>The Netherlands factory sector, though, reported slower growth in January - with its manufacturing PMI falling to 54.8 from 57 in December. </p><p>That's still comfortably above the 50-point mark that separates expansion from contraction, but suggest the sector was a little weaker last month.</p><p>NEVI Netherlands Mfg <a href="https://twitter.com/search?q=%23PMI&amp;src=hash">#PMI</a> falls from 57.0 in Dec to 54.8 in Jan <a href="http://t.co/KzgseYaMj2">http://t.co/KzgseYaMj2</a> <a href="http://t.co/EbvwnIzxNH">pic.twitter.com/EbvwnIzxNH</a></p><p>HSBC Turkey Manu <a href="https://twitter.com/search?q=%23PMI&amp;src=hash">#PMI</a> falls further from November’s 32-month peak of 55.0 to 52.7 in Jan <a href="http://t.co/qZeWfnWM72">http://t.co/qZeWfnWM72</a></p><p class="block-time published-time"> <time datetime="2014-02-03T08:31:31.166Z">8.31am <span class="timezone">GMT</span></time> </p><p>Some early reaction to the <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live#block-52ef5182e4b0ec81842b74c0">encouraging Spanish manufacturing data</a>:<br /></p><p>Spanish PMI employment component above 50 for the first time since October 2010 (at 50.8, a 6.5 year high). <a href="https://twitter.com/search?q=%23LessPainInSpain&amp;src=hash">#LessPainInSpain</a></p><p>More encouraging news from Spain. In January its manufacturing grew at fastest rate since April 2010. Signs, too, that companies are hiring.</p><p class="block-time published-time"> <time datetime="2014-02-03T08:29:31.224Z">8.29am <span class="timezone">GMT</span></time> </p><p><b>Good news from Spain, as the first surveys of European manufacturing in January start to flood in.</b></p><p>“There is a sense of optimism in the Spanish manufacturing sector at the start of 2014, with the PMI data for January suggesting that an economic recovery in the sector may be getting underway. </p><p>The expansion in output quickened to the sharpest in close to three-and-a-half years, with success in export markets fuelling growth. </p><p class="block-time published-time"> <time datetime="2014-02-03T08:21:16.460Z">8.21am <span class="timezone">GMT</span></time> </p><p>European stock markets have shaken off the Nikkei's woes, and are moving a little higher in early trading. The FTSE 100 is up 9 points, or 0.15%, at 6520, with the other main indices slightly higher.</p><p class="block-time published-time"> <time datetime="2014-02-03T08:18:46.299Z">8.18am <span class="timezone">GMT</span></time> </p><p><b>Heads-up:</b> The European Central Bank is expected to release more information about its banking stress tests this morning. </p><p><b><a href="http://uk.reuters.com/article/2014/02/03/uk-ecb-banks-idUKBREA1200E20140203">Reuters reports</a> </b>that this will include details of how the ECB will judge if loans have turned bad, and what the next step would be.</p><p class="block-time published-time"> <time datetime="2014-02-03T08:13:15.332Z">8.13am <span class="timezone">GMT</span></time> </p><p><b>An important eurozone story broke over the weekend -- that Germany is inching towards granting Greece a third bailout loan to cover the looming shortfall in its finances this year. </b></p><p>Germany has signalled it is preparing a third rescue package for Greece– provided the debt-stricken country implements &quot;rigorous&quot;austerity measures blamed for record levels of unemployment and a dramatic drop in GDP.</p><p>The new loan, outlined in a five-page position paper by Berlin's finance ministry, would be worth between €10bn to €20bn (&pound;8bn-16bn), according to the German weekly Der Spiegel, which was leaked the document.</p><p class="block-time published-time"> <time datetime="2014-02-03T07:58:39.149Z">7.58am <span class="timezone">GMT</span></time> </p><p><b>Will the Payment Protection Insurance scandal never end?</b></p><p>Lloyds Banking Group has told shareholders this morning that it's setting aside another &pound;1.8bn to cover PPI compensation payments -- taking its total bill close to &pound;10bn.</p><p>So total Lloyds provision now for PPI is &pound;9.8bn</p><p class="block-time published-time"> <time datetime="2014-02-03T07:46:09.621Z">7.46am <span class="timezone">GMT</span></time> </p><p><b>Good morning, and welcome to our rolling coverage of the financial markets, the world economy, eurozone and business.</b></p><p>Fears of an emerging market crisis and a global slowdown have driven Japan's stock market down into Correction territory, as investors begin the week in nervous mood.</p><p>There is little good news to trade on. Maybe by next week, people will start to buy shares back.</p><p>Price action in the Nikkei looks fairly sick right now...</p><p>﻿The outbreak of nervousness in risk assets has been attributed mainly to a combination of Fed <strong>tapering</strong>, <strong>Chinese growth</strong> concerns and <strong>emerging market</strong> currency volatility; we suspect the lukewarm corporate earnings news is as big an issue for equity investors.</p><p>In just over a month about $500 billion has been wiped off the value of the MSCI EM Index. That's a rout.</p> <a href="http://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-live">Continue reading...</a>Eurozone crisisEmerging marketsJapanNikkeiEuroLloyds Banking GroupMon, 03 Feb 2014 17:04:37 GMThttp://www.theguardian.com/business/blog/2014/feb/03/nikkei-falls-into-correction-territory-as-emerging-market-fears-hit-shares-business-livePhotograph: ROMEO RANOCO/REUTERSA lion dancer performs inside a trading floor at the Philippine Stocks Exchange (PSE) during Chinese Lunar New Year celebrations in Manila's Makati financial district February 3, 2014. Photograph: ROMEO RANOCO/REUTERSPhotograph: ROMEO RANOCO/REUTERSA lion dancer performs inside a trading floor at the Philippine Stocks Exchange (PSE) during Chinese Lunar New Year celebrations in Manila's Makati financial district February 3, 2014. Photograph: ROMEO RANOCO/REUTERSGraeme Wearden (until 2.30pm) and Nick Fletcher (now)2014-02-03T17:04:37ZSuntory's $16bn Jim Beam deal sounds desperatehttp://www.theguardian.com/business/blog/2014/jan/14/suntory-16m-jim-bean-deal-sounds-desperate
The proposed takeover price of £9.8bn – 20 times topline earnings – is beyond any valuation outsiders thought possible<p>Was it something they put in the Lucozade? Last year a unit of Suntory of Japan cheered up GlaxoSmithKline's shareholders by overpaying for the sporty drink plus Ribena. Now Suntory itself, on a grander scale, is doing the same for investors in Beam, distiller of Maker's Mark, Teacher's and Jim Beam itself.</p><p>A proposed takeover price of $16bn (&pound;9.8bn), or 20 times topline earnings, is beyond any valuation outsiders thought possible. Suntory, it is said, is keen to escape its slow home market. At this price, desperate is a better description.</p> <a href="http://www.theguardian.com/business/blog/2014/jan/14/suntory-16m-jim-bean-deal-sounds-desperate">Continue reading...</a>Food & drink industryBusinessMergers and acquisitionsWhiskyFood & drinkLife and styleJapanAsia PacificWorld newsUS newsTue, 14 Jan 2014 12:02:23 GMThttp://www.theguardian.com/business/blog/2014/jan/14/suntory-16m-jim-bean-deal-sounds-desperateBloomberg/Bloomberg via Getty ImagesSuntory proposed $16bn deal for Jim Beam is huge. Photograph: Bloomberg/Bloomberg via Getty ImagesBloomberg/Bloomberg via Getty ImagesJim Beam maker Beam Inc is being sold to Japan's Suntory in a $16bn deal. Photograph: Bloomberg/Bloomberg via Getty ImagesNils Pratley2014-01-14T12:02:23ZJapan's Nikkei makes biggest annual gain since 1972 - as it happenedhttp://www.theguardian.com/business/blog/2013/dec/30/japans-nikkei-makes-biggest-annual-gain-since-1972-live
<p>The Nikkei hit a fresh six-year high on the last day of trading in 2013, marking a 57% rise over the year</p><p class="block-time published-time"> <time datetime="2013-12-30T15:29:02.388Z">3.29pm <span class="timezone">GMT</span></time> </p><p>Signed contracts to buy existing homes in the US rose by 0.2% in November, ending five months of falls but below expectations of a 1% rise.</p><p>Despite the modest monthly rise pending home sales were still 1.6% lower than they were in November 2012 according to data from the <a href="http://www.realtor.org/news-releases/2013/12/pending-home-sales-edge-up-in-november">National Association of Realtors </a>(NAR).</p><p>We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014.</p><p>Although the final months of 2013 are finishing on a soft note, the year as a whole will end with the best sales total in seven years.</p><p class="block-time published-time"> <time datetime="2013-12-30T14:43:56.405Z">2.43pm <span class="timezone">GMT</span></time> </p><p>Across the Atlantic <strong>US markets</strong> are also roughly flat, as traders await the latest homes sales data.</p><p><strong>Dow Jones</strong>: +0.07 at 16,490.51</p><p class="block-time published-time"> <time datetime="2013-12-30T14:33:56.799Z">2.33pm <span class="timezone">GMT</span></time> </p><p>The modestly positive sentiment in early trading has slipped away, albeit on a day of thin trading volumes, leaving markets roughly flat.</p><p><strong>FTSE 100</strong>: -0.33% at 6,728.39</p><p class="block-time published-time"> <time datetime="2013-12-30T14:11:32.135Z">2.11pm <span class="timezone">GMT</span></time> </p><p><strong>Environment secretary Owen Paterson</strong> said that some power companies &quot;let their customers down badly&quot; over Christmas, when thousands of homes were left without power for several days when storms hit.</p><p>Quite clearly some of the power companies let their customers down badly.&nbsp;</p><p>It seems obvious at this stage that they let too many of their staff go away for the Christmas holiday, they didn't have enough people manning the call centres and that wasn't acceptable.</p><p>I think some of them [energy companies] definitely let their customers down, and I'm pleased to hear they are going to pay some compensation to those who are out of power.</p><p>Some of the companies have performed, some have not, and I think they have been penalised by the reaction of their customers. It's up to them to compensate their customers.</p><p class="block-time published-time"> <time datetime="2013-12-30T13:04:35.082Z">1.04pm <span class="timezone">GMT</span></time> </p><p>The improved global economic outlook and rising risk appetite has put <strong>gold</strong> on course for its biggest annual price fall in more than three decades.</p><p class="block-time published-time"> <time datetime="2013-12-30T11:57:12.460Z">11.57am <span class="timezone">GMT</span></time> </p><p>It may be a quiet day on the corporate front but there are still deals to be done. <strong>Rosneft</strong>, Russia's number one crude producer said it had agreed to sell up to 3.2m tonnes of oil products to BP, for up to $2.87bn.</p><p>Rosneft's board has also approved the sale of up to 1.3m tonnes of gas oil to BP for up to $1.2bn. BP owns around 20% of the Russian state-controlled company.</p><p class="block-time published-time"> <time datetime="2013-12-30T11:24:15.361Z">11.24am <span class="timezone">GMT</span></time> </p><p>The latest data from the <strong><a href="http://www.bankofengland.co.uk/statistics/Pages/hew/2013/Sep/default.aspx">Bank of England</a></strong> showed Britons continued to pay off their mortgages in the third quarter, as heightened caution persisted.</p><p>Markedly rising house prices and overall improved consumer confidence may increasingly lead to some people engaging in housing equity withdrawal going forward.</p><p>However, very low mortgage interest rates, the fact that house prices in some regions remain below their 2007 peak levels and an ongoing need for many people to improve their personal finances suggests that there will continue to be a significant net injection of housing equity for some time to come.</p><p class="block-time published-time"> <time datetime="2013-12-30T10:41:10.219Z">10.41am <span class="timezone">GMT</span></time> </p><p>Sentiment among <strong>Italian manufacturers</strong> improved at a slower rate than expected in December.</p><p>The manufacturing confidence index from ISTAT, Italy's statistics institute, rose to 98.2. lower than the 98.9 forecast by economists.</p><p class="block-time published-time"> <time datetime="2013-12-30T09:44:30.309Z">9.44am <span class="timezone">GMT</span></time> </p><p>Britain's &quot;voice of business&quot; has told companies that are doing well to pay workers more in the year ahead. <strong>John Cridland</strong>, the <strong>CBI's director general</strong>, said those businesses benefiting from economic recovery should press ahead with pay rises, criticising those he accused of keeping &quot;far too many people stuck in minimum-wage jobs&quot;.</p><p>Cridland set out his argument in an unusually forthright annual New Year message to business leaders:</p><p> The recovery is taking root and business leaders have a spring in their step compared to this time last year – but this is no time to rest on our laurels. Businesses must support employees in every part of the country to move up the career ladder, while also giving a helping hand to young people taking their first tentative steps into the world of work.&nbsp;</p><p>As the financial situation of many firms begins to turn a corner, one of the biggest challenges facing businesses is to deliver growth that will mean better pay and more opportunities for all their employees after a prolonged squeeze.</p><p class="block-time published-time"> <time datetime="2013-12-30T09:10:25.654Z">9.10am <span class="timezone">GMT</span></time> </p><p>At least four shots hit the residence of the <strong>German ambassador in Athens,</strong> according to police reports in Greece. It is thought no one was hurt in the early morning incident, and the identity of the attackers is unclear.</p><p>The shots were fired at the metal gate surrounding the high security residence, which is located on a busy street in the Greek capital. Sixty spent bullet cases were collected according to <a href="http://www.reuters.com/article/2013/12/30/us-greece-attack-idUSBRE9BT03I20131230">Reuters</a>, which had this to say:</p><p>Anti-German sentiment has grown during Greece's prolonged economic crisis, and many of those struggling with record unemployment and plummeting living standards blame Germany's insistence on fiscal rigor for their economic woes.</p><p><a href="http://www.reuters.com/places/germany" data-ls-seen="1">Germany</a> is the biggest single contributing nation to Greece's 240-billion euro bailouts which have kept the country afloat since 2010 and saved it from bankruptcy.</p><p class="block-time published-time"> <time datetime="2013-12-30T08:56:44.997Z">8.56am <span class="timezone">GMT</span></time> </p><p>Europe's major indices are largely in positive territory this morning, following the Nikkei's rise in Japan.</p><p><strong>FTSE 100</strong>: +0.1% at 6,757.38</p><p class="block-time published-time"> <time datetime="2013-12-30T08:45:27.015Z">8.45am <span class="timezone">GMT</span></time> </p><p>Over in Italy, <strong>Banca Monte dei Paschi di Siena</strong> is bracing itself for potential nationalisation, after its shareholders rejected vital fundraising plans.</p><p>Banca Monte dei Paschi di Siena's shares fail to open on time, no opening price, limit down</p><p class="block-time published-time"> <time datetime="2013-12-30T08:03:12.877Z">8.03am <span class="timezone">GMT</span></time> </p><p><strong>Good morning, and welcome to our rolling coverage of events across the world economy, the financial markets, the eurozone and the business world.</strong></p><p>Japan's <strong>Nikkei</strong> closed up 0.7% at 16,291.31 on Monday, the final day of trading in 2013.</p><p>Japan's Nikkei closes 57% up on the year. Could have another strong year in 2014. At 16,291 it is still less than half its bubble peak.</p> <a href="http://www.theguardian.com/business/blog/2013/dec/30/japans-nikkei-makes-biggest-annual-gain-since-1972-live">Continue reading...</a>Eurozone crisisJapanMon, 30 Dec 2013 15:29:02 GMThttp://www.theguardian.com/business/blog/2013/dec/30/japans-nikkei-makes-biggest-annual-gain-since-1972-livePhotograph: Julia Claxton / Barcroft Media/Julia Claxton / Barcroft MediaStorms hit power supplies to more than 150,000 homes over the Christmas period. Photograph: Julia Claxton/Barcroft MediaPhotograph: Julia Claxton / Barcroft Media/Julia Claxton / Barcroft MediaStorms hit power supplies to more than 150,000 homes over the Christmas period. Photograph: Julia Claxton/Barcroft MediaPhotograph: Tom Schierlitz/Getty ImagesGold is on course for its biggest loss in 32 years. Photograph: Tom Schierlitz/Getty ImagesPhotograph: Tom Schierlitz/Getty ImagesGold is on course for its biggest loss in 32 years. Photograph: Tom Schierlitz/Getty ImagesPhotograph: Rui Vieira/PABritons paid off their mortgages for a 22nd consecutive quarter in Q3, according to the latest data from the Bank of England. Photograph: Rui Vieira/PAPhotograph: Rui Vieira/PABritons paid off their mortgages for a 22nd consecutive quarter in Q3, according to the latest data from the Bank of England. Photograph: Rui Vieira/PAPhotograph: Max Rossi/ReutersPeople reflected in the window of a branch of Banca Monte Dei Paschi di Siena bank in Rome. Photograph: Max Rossi/ReutersPhotograph: Koji Sasahara/APJapanese flag Photograph: Koji Sasahara/APAngela Monaghan2013-12-30T15:29:02ZMarkets rally on hopes for growth in 2014http://www.theguardian.com/business/blog/2013/dec/24/markets-rally-hopes-for-growth-2014
<ul>
<li>UK Mortgage approvals up almost 40% in a yr</li>
<li>British workers' productivity slips 0.3% in November</li>
<li>European markets boosted by 'Santa rally'</li>
<li>Japan's Nikkei hits six-year high, China credit crunch eases</li>
<li>Banks knew of unusual currency moves before regulators' investigation</li>
</ul><p class="block-time published-time"> <time datetime="2013-12-24T13:33:56.561Z">1.33pm <span class="timezone">GMT</span></time> </p><p>The markets have closed early today and so are we, so here is quick closing summary.</p><p class="block-time published-time"> <time datetime="2013-12-24T12:38:28.171Z">12.38pm <span class="timezone">GMT</span></time> </p><p>In the end it was more a small glass of sherry than turkey with the trimmings. But a modest Santa rally has lifted the FTSE 0.23% to 6,693 points.</p><p>Spain's IBEX is up a healthy 0.6%, but no such cheer for France's CAC 40 index, which is down 0.08%, after those <a href="http://www.theguardian.com/business/blog/2013/dec/24/markets-rally-hopes-for-growth-2014#block-52b965a8e4b09f9df01d1b33">dismal GDP figures</a>&nbsp;released earlier today.</p><p>&quot;Stronger than expected Q3 GDP growth in the US and UK and stable growth in the eurozone... have encouraged investors who were previously on the sidelines to return to equity markets as annual gains across major global indices push to their highest levels since 2009.</p><p class="block-time published-time"> <time datetime="2013-12-24T12:22:13.262Z">12.22pm <span class="timezone">GMT</span></time> </p><p>Here is our story on those rocketing mortgage figures:&nbsp;</p><p> <a href="http://www.theguardian.com/business/2013/dec/24/mortage-approvals-higher-november">Mortgage approvals a third higher in November than last year</a></p><p>It also raises questions as to whether the extension to the Funding for Lending Scheme (FLS)&nbsp;in April to favour lending to smaller and medium-sized businesses has had much impact.</p><p>&nbsp;With the UK sustaining a decent level of economic activity and prospects looking relatively bright, it seems highly likely that business demand for credit will pick up appreciably over the coming months.</p><p class="block-time published-time"> <time datetime="2013-12-24T12:05:15.467Z">12.05pm <span class="timezone">GMT</span></time> </p><p>So let's touch base with&nbsp;<a href="http://www.breakingviews.com/buzzword-visionaries-will-rightsize-the-lexicon/21125667.article">Reuters Breaking Views</a>, who have been on a deep dive into the latest trends in business jargon.</p><p>Analysis of 15 years of corporate press releases, and a decade or so of conference calls, shows some expressions are relentless in taking share. &quot;Visionary&quot; and &quot;disruptive&quot; have consistently surprised to the upside...</p><p>If you are looking to express in terms of linguistics, there is a rich opportunity set to target. But be careful with what looks like low-hanging fruit. These phrases, net-net, may transitioned beyond an inflection point&nbsp;</p><p class="block-time published-time"> <time datetime="2013-12-24T11:30:17.581Z">11.30am <span class="timezone">GMT</span></time> </p><p><strong>Last minute gift idea?</strong> <em>Spotted by&nbsp;Nick Malkoutzis</em>&nbsp;at <em>Kathimerini</em>.&nbsp;</p><p>Err, so who wants to play European Financial Stability Facility advisers?</p><p>Found perfect Christmas present for <a href="https://twitter.com/YiannisMouzakis">@YiannisMouzakis</a> today. cc @efiethimiou <a href="https://twitter.com/ManosGiakoumis">@ManosGiakoumis</a> <a href="https://twitter.com/joannakakissis">@joannakakissis</a> <a href="http://t.co/96FY3RB2Os">pic.twitter.com/96FY3RB2Os</a></p><p class="block-time published-time"> <time datetime="2013-12-24T11:18:49.567Z">11.18am <span class="timezone">GMT</span></time> </p><p><strong>There is not much festive joy for&nbsp;</strong><strong>President Fran&ccedil;ois Hollande</strong>&nbsp;in France's latest GDP data: figures released by the Insee statistics agency show <em><strong>that the French economy shrank 0.1% in the third quarter,&nbsp;</strong> </em>a notable reversal after the economy grew 0.6% in Q2.</p><p class="block-time published-time"> <time datetime="2013-12-24T10:33:04.377Z">10.33am <span class="timezone">GMT</span></time> </p><p>More UK data, but this time more gloom than boom. <strong>UK labour productivity fell 0.3%</strong> in the third quarter of the year, although output per worker rose slightly, according to the Office for National Statistics.&nbsp;</p><p>Other highlights from the ONS<a href="http://www.ons.gov.uk/ons/rel/productivity/labour-productivity/q3-2013/stbq313.html#tab-Labour-Productivity--Q3-2013">&nbsp;release</a>:</p><p>Xmas eve and the ONS brings us weak productivity figures: <a href="http://t.co/p2uvemmFfY">http://t.co/p2uvemmFfY</a></p><p>Longer we get weak productivity data, more likely people are to think it's the 'new normal' or 'inevitable' after crisis. It's neither.</p><p><a href="https://twitter.com/DuncanWeldon">@DuncanWeldon</a> <a href="https://twitter.com/stefanstern">@stefanstern</a> also confirms 2013 a truly 'hard slog year', more work, longer average hours, but falling real wages</p><p class="block-time published-time"> <time datetime="2013-12-24T10:09:41.492Z">10.09am <span class="timezone">GMT</span></time> </p><p>Back to the UK, where UK mortgage approvals have reached a four-year high, according to the British Bankers' Association.</p><p>The most eye-catching statistic is the jump in gross mortgage borrowing to <strong>&pound;10.3bn in November, 37% higher than the previous year.&nbsp;</strong>The BBA credits &quot;assistance schemes for mortgages ... helping first-time buyers and housing chains generally&quot; i.e. the government's massive mortgage subsidy scheme <a href="http://www.theguardian.com/money/help-to-buy-scheme">Help to Buy</a> .</p><p>More new mortgages and a net rise in borrowing reflected a&nbsp;stronger mortgage market in November. With approvals up a third&nbsp;on a year earlier, lending will continue to be strong in the months&nbsp;ahead.</p><p>Annual growth in borrowing by manufacturing companies has&nbsp;turned positive for the first time in four years, although overall&nbsp;borrowing by companies is generally still subdued.</p><p>UK BBA: Lending to UK businesses fell even faster in November as it dropped by &pound;2 billion inspite of the <a href="https://twitter.com/search?q=%23BoE&amp;src=hash">#BoE</a> and government <a href="https://twitter.com/search?q=%23FLS&amp;src=hash">#FLS</a> hype</p><p class="block-time published-time"> <time datetime="2013-12-24T09:47:33.411Z">9.47am <span class="timezone">GMT</span></time> </p><p><strong>Enrico Letta</strong>, Italy's prime minister, said his country was experiencing &quot;social fatigue&quot; , but promised further reforms in the new year. Speaking at his year-end press conference, he promised to present a formal coalition pact in January.</p><p>&nbsp;I have been part of this change and I feel the full weight of responsibility. This generation will have the opportunity of changing&nbsp;Italy&nbsp;and I am convinced it can do it.</p><p>We have the most complex part of this crisis behind us and we have to be in a position to take advantage of some important opportunities.</p><p>Letta was speaking shortly before the Senate completed parliamentary approval for the 2014 budget after it cleared the lower house on Friday.</p><p>He said a new pact for his coalition government to be worked out in detail in January would address issues ranging from cutting taxes that deter&nbsp;companies&nbsp;from hiring to easing citizenship laws for the children of immigrants.</p><p class="block-time published-time"> <time datetime="2013-12-24T09:05:39.813Z">9.05am <span class="timezone">GMT</span></time> </p><p>One of the most interesting business stories this morning throws more light on investigations into possible manipulation of currency markets.</p><p>The BBC reports that banks knew of unusual currency trading four years before regulators began investigating the &quot;London fix&quot;.</p><p>... research by Morgan Stanley and seen by the BBC shows that banks were already concerned about the London fix in 2009 - four years before the investigations were announced.</p><p>It noted unusually sharp movements in exchange rates around 4pm, concluding that anyone trading at that time is unlikely to get the best possible deal available that day, increasing the costs of currency trades.</p><p>I think it's fairly clear that everyone in this country who has shares in pension funds, and that's most of us one way or the other, will have seen a fall in the value of those shares as a result of this.</p><p>And that's not a politician saying it - it is what a bank was telling its own customers in 2009.</p><p class="block-time published-time"> <time datetime="2013-12-24T09:02:09.338Z">9.02am <span class="timezone">GMT</span></time> </p><p>More gloom for the British high street, as the<a href="http://www.theguardian.com/uk-news/2013/dec/24/storm-batters-uk-before-christmas-live-blog">&nbsp;stormy weather&nbsp;</a>that has battered southern parts of the country weather moves further north today.&nbsp;</p><p>Given retailers’ hopes that the last couple of days before Christmas would see a final strong surge in sales, the awful weather could not have come at a worse time.&nbsp;The very wet and windy weather must have had a significant dampening impact on shopper footfall.</p><p>On the face of it, this plays into the hands of the online retailers – even if presents bought now online cannot be delivered in time for Christmas, at least the givers can say they are bought and on the way!</p><p class="block-time published-time"> <time datetime="2013-12-24T08:53:49.012Z">8.53am <span class="timezone">GMT</span></time> </p><p><strong>Good morning, and welcome to our rolling coverage of the latest events across the eurozone, the financial markets and the global economy.</strong></p><p>European markets have nudged up, after Japan’s main stock index hit a six-year high. The Nikkei finished up 0.1% on Tuesday, as investors took cheer from positive US data, lifting sentiment on the global economy.</p><p><strong>The rally should continue next year, Europe has still a big potential for a catch-up rally versus Wall street.</strong></p> <a href="http://www.theguardian.com/business/blog/2013/dec/24/markets-rally-hopes-for-growth-2014">Continue reading...</a>EuroBanks and building societiesJapanChinaGermanyFranceUK chartsUK newsWorld newsTue, 24 Dec 2013 13:33:56 GMThttp://www.theguardian.com/business/blog/2013/dec/24/markets-rally-hopes-for-growth-2014Photograph: Q Webb/ V Flasseur at Reuters Breaking ViewsBusiness jargon never seems to be demised Photograph: /Q Webb/V Flasseur at Reuters Breaking ViewsPhotograph: Q Webb/ V Flasseur at Reuters Breaking ViewsBusiness jargon never seems to be demised Photograph: /Q Webb/V Flasseur at Reuters Breaking ViewsPhotograph: FRANK PERRY/AFP/Getty ImagesSaint-Guenole, western France, on Monday. Fourteen regions in the north-west are on alert as the storm passes through today. Photograph: FRANK PERRY/AFP/Getty ImagesPhotograph: FRANK PERRY/AFP/Getty ImagesSaint-Guenole, western France, on Monday. Fourteen regions in the north-west are on alert as the storm passes through today. Photograph: FRANK PERRY/AFP/Getty ImagesPhotograph: Simona Granati/ Simona Granati/Demotix/CorbisEnrico Letta at his end-of-year press conference at the Montecitorio Palace in Rome. Simona Granati/Demotix/CorbisPhotograph: Simona Granati/ Simona Granati/Demotix/CorbisEnrico Letta at his end-of-year press conference at the Montecitorio Palace in Rome. Simona Granati/Demotix/CorbisPhotograph: OLIVIA HARRIS/REUTERSWet and windy weather on Oxford Street in central London. Olivia Harris/ReutersPhotograph: OLIVIA HARRIS/REUTERSWet and windy weather on Oxford Street in central London. Olivia Harris/ReutersPhotograph: Matt Cardy/Getty ImagesCanary Wharf, east London. Matt Cardy/Getty ImagesPhotograph: Matt Cardy/Getty ImagesCanary Wharf, east London. Matt Cardy/Getty ImagesJennifer Rankin2013-12-24T13:33:56ZAre Europe's banks starting to resemble Japan's?http://www.theguardian.com/business/blog/2012/may/03/european-banks-japan
Analysts see similarities between Europe and Japan, in part because of the European Central Bank's long-term refinancing operation (LTRO), which is throwing liquidity at the banks<p>Japan's economic collapse twenty years ago caused chaos in the banking system. Analysts at the investment banking arm of Barclays are now pointing to similarities between the fate of European economies and their banks.</p><p>While the analysts point to differences - Europe's banks are more profitable and not trying to hide their losses in the way Japan's banks did during the 1990s crisis - they also see similarities emerging, in part because of the European Central Bank's long-term refinancing operation (LTRO) which is throwing liquidity at the banks.</p><p>Both banking systems reached c20% of their respective stock markets, and six years from peak, both halved to around c10%. Worryingly, Japan's banks then went on decline a further 40% over the next half decade.</p> <a href="http://www.theguardian.com/business/blog/2012/may/03/european-banks-japan">Continue reading...</a>European banksWorld newsBankingEuropeBusinessJapanAsia PacificBarclaysThu, 03 May 2012 10:44:31 GMThttp://www.theguardian.com/business/blog/2012/may/03/european-banks-japanBarclays/DatastreamJapanese v eurozone banks Photograph: Barclays/DatastreamJill Treanor2012-05-03T10:44:31ZEurozone crisis live: Spanish debt auction cheers markets after Japan pledges $60bn to IMF - as it happenedhttp://www.theguardian.com/business/2012/apr/17/eurozone-crisis-japan-firewall-imf
• <a href="http://www.guardian.co.uk/business/2012/apr/17/eurozone-crisis-japan-firewall-imf#block-24">IMF warns against too much austerity</a><br />• <a href="http://www.guardian.co.uk/business/2012/apr/17/eurozone-crisis-japan-firewall-imf#block-12">Spanish debt auction results in full</a><br />• <a href="http://www.guardian.co.uk/business/2012/apr/17/eurozone-crisis-japan-firewall-imf#block-2">Japan offers $60bn in fresh loans to the International Monetary Fund</a><br />• <a href="http://www.guardian.co.uk/business/2012/apr/17/eurozone-crisis-japan-firewall-imf#block-3">Lagarde hails Japan's leadership</a><br />• <a href="http://www.guardian.co.uk/business/2012/apr/17/eurozone-crisis-japan-firewall-imf#block-4">Will China follow suit?</a><br />• Spanish 10-year bond yields below 6%<br />• <a href="http://www.guardian.co.uk/business/2012/apr/17/eurozone-crisis-japan-firewall-imf#block-1">India cuts interest rates</a><br />• <a href="http://www.guardian.co.uk/business/2012/apr/17/eurozone-crisis-japan-firewall-imf#block-6">Today's agenda</a><p><span class="timestamp">6.10pm:</span> With the Dow Jones index rallying by 200 points on Wall Street, I'm going to knock things on the head here.</p><p>Thanks, as ever, for reading and for the comments. The <a href="http://www.guardian.co.uk/business/2012/apr/17/eurozone-crisis-japan-firewall-imf?commentpage=last#block-32">5.29pm post</a> rounds up most of the main events. Good night!</p><p>I must express my profound unease. It is a negative decision for everyone.</p><p>Today's forecasts confirm what has been clear for some time. By raising taxes and cutting spending too far and too fast the Government has hit confidence, squeezed households and choked off the recovery. <br /> <br />Only anaemic growth is forecast for this year, and since the spending review we have had no growth at all. Today's forecast for 2012 merely brings the IMF in line with the deeply disappointing OBR forecasts from the March budget of just 0.8% growth this year. </p><p><br />A set of solid earnings reports has allowed markets to shrug off the eurozone crisis, at least for now.</p><p>Big-name American firms like Goldman Sachs, Coca-Cola and Johnson &amp; Johnson have all helped investors to focus on the positive, while stronger German economic sentiment is providing an excuse to forget the worsening situation in Spain.</p><p>The forecasts are a blow to Prime Minister Mario Monti, whose popularity is sliding and whose reform efforts are meeting rising criticism and resistance as the country's borrowing costs rise.</p><p>IMF wants more ECB easing. Lagarde Vs Merkel. Faites vos jeux $EURUSD</p><p>— Nicola Duke (@NicTrades) <a href="https://twitter.com/NicTrades/status/192254146550837248" data-datetime="2012-04-17T14:12:15+00:00">April 17, 2012</a></p><p>intensified concern about an oil supply shock related to the Islamic Republic of Iran could cause a spike in oil prices that depresses output in the euro area, amplifying adverse feedback loops between the household, sovereign, and banking sectors.</p><p>In the meantime, the oil price shock could also trigger a reassessment of the sustainability of credit booms and potential growth in emerging Asia, leading to hard landings in these economies. This could, in turn, prompt a collapse <br />in non-oil commodity prices that would hurt many emerging and developing economies, especially in Latin America and Africa. More generally, a concurrent rise in global risk aversion could lead to a sudden reversal of capital flows to emerging and developing economies.</p><p>The financial and real spillovers to other regions, especially emerging Europe, would likely be very large. This could cause major political shocks that could aggravate economic stress to levels well above those after the Lehman collapse.</p><p>The WEO bears the stamp of the Fund's chief economist, Olivier Blanchard, who was brought in by the former managing director, Dominique Strauss-Kahn, just as Lehman was going belly-up in September 2008. Blanchard is a fan of John Maynard Keynes and it shows: worry first about growth, then the deficit; use aggressive monetary policy to drive down short-term and long-term interest rates; deflation not inflation is a bigger risk; austerity can be self-defeating.</p><p>Blanchard is, of course, only in charge of one part of the Fund, and it would be naive to imagine that the orthodox thinking that characterised the institution's Washington consensus period has disappeared entirely. It hasn't, and there are some Fund-watchers who say the views of those in charge of the individual country programmes pay scant attention to what Blanchard says when they are deciding the terms on which financial support will be given.</p><p>At this moment, when confidence is absolutely crucial, where Spain has external financing problems, and will have for a long time to come...the reduction of the deficit to give confidence to investors is crucial.</p><p>With this attitude, this hostility from the Argentine authorities, there will be consequences that we'll see over the next few days. They will be in the diplomatic field, the industrial field, and on energy.</p><p>The Argentine Tango is the consummate dance of love, but there was little affection for the country's largest foreign investor in Buenos Aires yesterday. </p><p>When Posen made his forecast, he was quoted in the Guardian as saying that: &quot;If I have made the wrong call .... I would not pursue a second term. They should have somebody who gets it right and not me.&quot;</p><p>I admire such frankness and Mr Posen's willingness to be held accountable. But why just Posen? The Bank of England should, as Mr Posen says, have people who get it right.</p><p><a href="https://twitter.com/search/%2523Spain">#Spain</a> maintains market access with bill sale, even with higher yields -- sale moderately successful if you like your glass half full. BBVA</p><p>— David Tweed (@DavidTweed) <a href="https://twitter.com/DavidTweed/status/192177479048368128" data-datetime="2012-04-17T09:07:36+00:00">April 17, 2012</a></p><p>It is not possible that the ECB does not participate in suporting growth, like all the central banks in the world... It is wrong to say that just because the ECB is independent, we do not have the right to talk.</p><p><br />We are heading from one big financial crisis into another soon enough. Japan is sitting on a pile of trouble just simmering like a mad volcano.</p><p><br />Japan's early commitment may accelerate other G20 countries decisions, though the US is unlikely to change its mind.<br /> <br />And Europe can do with a stronger firewall. Spanish yields widened again yesterday, the 10 year was 8bps wider and at 6.04% closed above the psychologically important 6% level for the first time in 4 months. The 5 year CDS spread closed at a record high of 510bps.</p><p>Japan has a longstanding record of helping others, and of supporting the IMF in its core mission of helping to support economic stability in all its member countries. I am grateful for Japan's leadership and strong commitment to multilateralism, and I call on the broader Fund membership to follow Japan's lead.</p><p>Following a series of eurozone's policy responses, it is important to strengthen IMF funding and pave the way for ensuring an end to the crisis not only for the eurozone but also for Japan and Asian countries.</p><p>I don't think Europe has made enough efforts on their own....I must urge them to beef up their firewall further. </p> <a href="http://www.theguardian.com/business/2012/apr/17/eurozone-crisis-japan-firewall-imf">Continue reading...</a>Eurozone crisisEuroBusinessJapanIndiaFinancial crisisInternational Monetary Fund (IMF)EconomicsAusterityTue, 17 Apr 2012 17:13:00 GMThttp://www.theguardian.com/business/2012/apr/17/eurozone-crisis-japan-firewall-imfSTEPHEN JAFFE/HANDOUT/EPAInternational Monetary Fund's chief economist Olivier Blanchard. Photograph: STEPHEN JAFFE/HANDOUT/EPAToru Hanai/ReutersJun Azumi. Photograph: Toru Hanai/ReutersSarah Lee/GuardianShadow Treasury chief secretary Rachel Reeves. Photograph: Sarah Lee for the GuardianGallo Images/Getty ImagesChristine Lagarde, head of the IMF, has welcomed Tokyo's support towards her target of a $600bn rescue package. Photograph: Gallo Images/Getty ImagesChip Somodevilla/Getty ImagesIMF chief Christine Lagarde speaks at the Brookings Institution 12 April, 2012 in Washington, DC. Photograph: Chip Somodevilla/Getty ImagesGraeme Wearden2012-04-17T17:13:00ZStrong yen gives much-needed boost to British manufacturing as Japan suffershttp://www.theguardian.com/business/blog/2011/oct/21/strong-yen-japan-nissan-uk-manufacturing
Like many of its corporate counterparts, Nissan is a global company that happens to be based in Japan. It produced 3.75m cars last year and nearly 2.7m of them were built outside Japan<p>Japan loves a catchphrase but this year's most popular boardroom quip is not uttered for comic effect. It is <em>chō endaka</em>, or &quot;super-strong yen&quot;. We admire the global reach of Japanese business but perhaps don't acknowledge that it is not just a symptom of corporate dynamism. It is also a sign of a stagnant domestic economy and, more recently, a local currency that happens to be a safe haven for investors and is therefore pushing costs through the roof. No wonder there are Japanese factories in Sunderland, Bangalore and Chattanooga. </p><p></p> <a href="http://www.theguardian.com/business/blog/2011/oct/21/strong-yen-japan-nissan-uk-manufacturing">Continue reading...</a>NissanYenJapanCurrenciesBusinessAutomotive industryManufacturing sectorToyotaHondaAsia PacificFri, 21 Oct 2011 08:56:19 GMThttp://www.theguardian.com/business/blog/2011/oct/21/strong-yen-japan-nissan-uk-manufacturingDan Milmo/GuardianNissan Leaf electric car is coming to Sunderland as a weak pound is making UK manufacturing more competitive. Photograph: Dan Milmo for the GuardianDan Milmo/GuardianNissan Leaf electric car being charged outside Nissan's Yokohama headquarters. Photograph: Dan Milmo for the GuardianDan Milmo, industrial editor, in Tokyo2011-10-21T08:56:19ZThe Toyota wayhttp://www.theguardian.com/business/blog/2011/oct/20/toyota-way-factory-japan
A tour of the Japanese manufacturer's hi-tech main factory shows why the car in front is a Toyota – for now<p>A tour of Toyota's production line in Toyota City – <a href="http://oica.net/wp-content/uploads/ranking-2010.pdf">the world's largest carmaker (pdf)</a> is big enough to get its own conurbation – underlines why the maker of the Lexus, Prius and Yaris marques is a pioneer of modern mass-production and why it suffered so badly in the March earthquake.</p><p>Dozens of vehicles snake through the plant in a process streamlined by the &quot;Lean&quot; system that is synonymous with Toyota and counts many global companies among its adherents. Driverless carts whizz by autonomously, like in a Pixar film, ferrying parts to assembly-line workers.</p> <a href="http://www.theguardian.com/business/blog/2011/oct/20/toyota-way-factory-japan">Continue reading...</a>Automotive industryJapanBusinessWorld newsAsia PacificThu, 20 Oct 2011 08:58:00 GMThttp://www.theguardian.com/business/blog/2011/oct/20/toyota-way-factory-japanDan milmo/GuardianA production line at Toyota's factory in Toyota City. Photograph: Dan MilmoDan milmo/GuardianToyota factory. Photograph: Dan milmo for the GuardianDan Milmo in Toyota City2011-10-20T08:58:00ZRail is Japan's newest export foothold in the UKhttp://www.theguardian.com/business/blog/2011/oct/19/rail-japan-newest-export-uk
A consortium led by Hitachi will build the sequel to the Intercity 125 fleet – and its class 395 javelin carriages are already ferrying passengers from St Pancras to Ashford and beyond<p>In 1925 Seiji Miita, then general manager of the Hitachi rail factory in Kudamatsu City, travelled to Britain to study &quot;advanced train technology&quot; to take back to Japan. </p><p>Nearly 90 years later expertise is flowing in the other direction and his successor, Kentaro Masai, is sending state-of-the-art carriages to the UK instead.</p> <a href="http://www.theguardian.com/business/blog/2011/oct/19/rail-japan-newest-export-uk">Continue reading...</a>BusinessJapanWorld newsRail transportRail transportBombardierAsia PacificWed, 19 Oct 2011 09:36:00 GMThttp://www.theguardian.com/business/blog/2011/oct/19/rail-japan-newest-export-ukDan Milmo/guardian.co.ukA Hitachi train which was built at the Kasado factory. Photograph: Dan MilmoDan Milmo/guardian.co.ukA Hitachi train. Photograph: Dan Milmo/guardian.co.ukDan Milmo in Kudamatsu City2011-10-19T09:36:00ZJapan's bullet train – envied by UK commuters, and governmenthttp://www.theguardian.com/business/blog/2011/oct/18/japan-shinkansen-bullet-train
The 150mph trains have provided a blueprint for government hopes for High Speed Two, linking London and the north<p>This is one Japanese export that will strike jealousy into the hearts of British commuters: the Shinkansen train. These vehicles criss-cross Japan at 150mph on nearly 1,500 miles of track and a derivative of this technology operates on our modest contribution to the high speed rail revolution – the 68-mile High Speed One route from London to the Channel Tunnel. The high-speed commuter service on that route, from St Pancras International to Ashford in Kent and beyond, uses trains manufactured by Hitachi, a Japanese firm that has played a prominent role in pioneering high-speed rail technology.<br /> <br />I will be visiting their factory via Shinkansen in Kasado, in west Japan, today, and will see the facility where they plan to build another British train order – the replacement of the distinctive but ageing intercity 125 fleet. Foreign-built train carriages are a sensitive subject in the UK currently, thanks to <a href="http://www.guardian.co.uk/business/2011/sep/04/siemens-take-crossrail-contract-germany">Siemens of Germany trumping Bombardier's Derby factory for a &pound;1.4bn government contract</a>, but Japan has a pedigree in this field. Even if Vince Cable and western-based economists such as Raghuram Rajan want Japan to export a little bit less and consume a bit more, this technology has brought undoubted benefits since leaving these shores. More than 50 years on from when Japan launched its first bullet train from Tokyo to Osaka , Spain, France, Germany and China all boast extensive high-speed rail networks. Britain is trying too.<br /> <br />The Japanese example features in the <a href="http://highspeedrail.dft.gov.uk/sites/highspeedrail.dft.gov.uk/files/hsr-consultation.pdf">British government's argument for a sequel to High Speed One</a>, which is designed to run from London to Birmingham and, ministers hope, onwards to Leeds and Manchester by 2032. The consultation states: &quot;In Japan … high-speed rail has seen a dispersal of investment and economic activity from the main 'developed region' towards the periphery.&quot; Opponents of High Speed Two argue that Britain is demographically, and geographically, smaller. Most of those criticisms come with a southern accent and you don't hear many people in Manchester , Leeds and Glasgow calling for the mooted &pound;32bn investment in high-speed (for the full London-to-the-north route) to go on conventional rail instead. The bullet train is one of the products, along with the Lexus and the Sony walkman, that is synonymous with Japanese industry and state-of-the-art infrastructure is a prerequisite for a leading manufacturing nation. This is a Japanese export that has won over many countries.</p> <a href="http://www.theguardian.com/business/blog/2011/oct/18/japan-shinkansen-bullet-train">Continue reading...</a>JapanBusinessTransportRail transportRail transportTravel & leisureWorld newsAsia PacificHS2Tue, 18 Oct 2011 08:20:00 GMThttp://www.theguardian.com/business/blog/2011/oct/18/japan-shinkansen-bullet-trainGina Calvi/AlamyA shinkansen (bullet train) crossing a bridge in the Ginza area of Tokyo. Photograph: Gina Calvi/AlamyGina Calvi/AlamyA shinkansen (bullet train) crossing bridge in the Ginza area of Tokyo.
Photograph: Gina Calvi/AlamyDan Milmo2011-10-18T08:20:00ZJapan needs European recovery to boost exportshttp://www.theguardian.com/business/blog/2011/oct/17/japan-european-recovery-exports
Tokyo wants the eurozone to sort out its debt crisis – so EU economies can hoover up Japanese exports to drive the recovery from March's devastating earthquake and tsunami<p>The Japanese news bulletin illustrated the eurozone crisis simply: a giant grey cloud hovering above a map of Europe, where the national flags of Greece, Portugal, Spain and Italy are are adorned with the countries' respective debt burdens. </p><p>It is a relevant story here because, in an ideal world, these nations would restructure their debts – while not putting the global economy on a <a href="http://en.wikipedia.org/wiki/Shinkansen">Shinkansen</a> to ruin in the process – and hoover up the exports that will drive Japan's recovery from the <a href="http://www.guardian.co.uk/world/japan-earthquake-and-tsunami">earthquake, tsunami and nuclear breakdown in March</a>. </p> <a href="http://www.theguardian.com/business/blog/2011/oct/17/japan-european-recovery-exports">Continue reading...</a>Eurozone crisisJapanManufacturing sectorEuropeAsia PacificBusinessMon, 17 Oct 2011 08:26:00 GMThttp://www.theguardian.com/business/blog/2011/oct/17/japan-european-recovery-exportsAPThe aftermath of the March 11 tsunami and its cleanup is shown in this composite photograph taken in Sendai, northeastern Japan. Photograph: APDan Milmo2011-10-17T08:26:00ZView from Japanhttp://www.theguardian.com/business/blog/2011/oct/16/view-from-japan-manufacturing-recovery
Dan Milmo will be blogging from Japan as he visits Nissan, Toyota and Hitachi – and assesses how well the country's manufacturing sector has recovered from the tsunami<p>Next week the <a href="http://www.google.co.uk/url?sa=t&amp;source=web&amp;cd=1&amp;ved=0CBsQFjAA&amp;url=http%3A%2F%2Fwww.guardian.co.uk%2Fprofile%2Fdanmilmo&amp;rct=j&amp;q=dan%20milmo&amp;ei=NB2YTsTBGY7E8QORutnuBQ&amp;usg=AFQjCNEkrdbccG-OcsjEVWfuTOxQNHvP8w&amp;cad=rja">Guardian's industrial editor, Dan Milmo</a>, will be blogging each morning from Japan where he will be gauging the health of the country's manufacturing sector in the wake of the earthquake and tsunami. </p><p>He will be visiting Nissan, Toyota, Hitachi and Komatsu (which makes big diggers among other things) as well as providing comment on how Japan can help address the global trade imbalances that have <a href="http://www.guardian.co.uk/business/2011/aug/10/economic-rebalancing-act-too-difficult-to-pull-off-nils-pratley">troubled the likes of Bank of England governor Sir Mervyn King recently</a>. </p> <a href="http://www.theguardian.com/business/blog/2011/oct/16/view-from-japan-manufacturing-recovery">Continue reading...</a>JapanManufacturing sectorBusinessGlobal economyWorld newsAsia PacificTsunamisSun, 16 Oct 2011 14:00:00 GMThttp://www.theguardian.com/business/blog/2011/oct/16/view-from-japan-manufacturing-recoveryHiroto Nomoto/APJapanese industry is working to recover from March's devastation. Photograph: APHiroto Nomoto/APJapan earthquake: Otsuchi. Photograph: Hiroto Nomoto/APJill Treanor2011-10-16T14:00:00ZJapan stock market falls 10.6% as nuclear fears spark panic sellinghttp://www.theguardian.com/business/blog/2011/mar/15/japan-stocks-in-freefall
<p>Japan's stock market went into freefall on Tuesday, plunging more than 10% amid growing radiation fears in the aftermath of Friday's tsunami.</p><p>The Nikkei 225 share average closed 10.6% down, having been as much as 14.4% lower at one stage. Over two days the benchmark index has lost 16% of its value, its biggest two-day decline since the 1987 crash.</p> <a href="http://www.theguardian.com/business/blog/2011/mar/15/japan-stocks-in-freefall">Continue reading...</a>JapanJapan disasterNikkeiFTSEAsia PacificTue, 15 Mar 2011 07:06:27 GMThttp://www.theguardian.com/business/blog/2011/mar/15/japan-stocks-in-freefallAlex Hawkes2011-03-15T07:06:27Z